- Sentiment: Bearish
- No. of candles: 4
- Direction: Reversal
What Is The Bearish Three Line Strike Candlestick Pattern?
The Bearish Three Line Strike pattern is a bearish reversal pattern that consists of four candles.
The first three candles in the Japanese candlestick pattern are long white (bullish) candles that trade consecutively higher, followed by a long black (bearish) candle that closes below the low of the third white candle, indicating a potential trend reversal.
What Is The Psychology Behind The Bearish Three Line Strike Pattern?
The Bearish Three Line Strike pattern reflects a potential shift in market sentiment from bullish to bearish. During the period of the first white candle, buyers are in control and push the price higher.
The second and third white candles continue to move higher, indicating a strong bullish sentiment.
However, during the period of the fourth black candle, sellers regain control and push the price lower, closing below the low of the third white candle and suggesting a potential trend reversal.
Japanese Candlestick Charting Techniques, Second Edition
43% OffHow To Trade The Bearish Three Line Strike Reversal Pattern?
To trade the Bearish Three Line Strike pattern, wait for confirmation by a subsequent bearish candle or another technical indicator.
The sell trigger occurs when the price moves and closes below the low of the fourth black candle, confirming the pattern.
Place a stop loss order above the high of the third white candle to protect against potential false breakouts or reversals.
As the price moves in your favor, consider using trailing stops or other risk management techniques to lock in profits and minimize potential losses.
Additional Tips
The Bearish Three Line Strike pattern is a rare pattern, and traders should use it in conjunction with other technical indicators and chart patterns to confirm the trend change.
Additionally, be aware of the overall market context and consider factors such as support and resistance levels, as well as the strength of the prevailing trend.
Keep in mind that no single pattern can guarantee a trend reversal, and proper risk management is always necessary.
Continue to learn about Japanese candlesticks through books, such as Steve Nison’s “Japanese Candlestick Charting Techniques” and “Beyond Candlesticks.”