Three line strike patterns are bullish patterns. They are a four candlestick pattern that takes place near support levels. The first three candlesticks are bearish and are either red or black on stock charts. The fourth is a bullish candlestick that closes above the third. Look for possible continuation upwards if price rises above fourth candle and holds. Watch our video on how to identify and trade three line strike patterns.
What Is a Three Line Strike Pattern & How to Identify These Patterns?
A three line strike pattern consists of 4 candlesticks that form near support levels. They start with 3 bearish candlesticks and then the 4th bullish candlestick engulfs the 3 bearish ones. Typically, this causes a bullish reversal pattern.
These patterns are four candlestick chart patterns. The three line strike candlesticks pattern is a continuation pattern. Watch our video above to learn how to trade them.
The 3 line strike is actually pretty rare and harder to find on the larger time frames. There are both bullish and bearish three line strike candlestick patterns.
Based off the name of this chart pattern you could see it as a baseball game. You have two teams, the buyers and the sellers. Just like in baseball when you see those three strikes one side is out. By the same token, depending on who you’re rooting for, you could be frustrated or happy by the outcome.
Basics of Three Line Strike Candlesticks Patterns
There are two different three line strike candlesticks patterns; bullish and bearish. These patterns considered to be continuation patterns. While the bullish 3 line is a bullish continuation pattern, conversely, the bearish 3 line candlestick pattern is a bearish continuation pattern (bookmark our stocks lists page which is updated daily).
This pattern is made up of four candles. Three of them known as strikes. In other words, you have three candlesticks that stair step up or down followed by a large bullish or bearish candlestick.
This is where it gets important not to get caught up in the exact name of the pattern. There could be a couple patterns being formed while forming three line strike candlesticks patterns.
If it’s bullish you could make a case for a three white soldiers pattern formation. If bearish, it can be seen as three black crows patterns. Once the fourth candle develops you could even see an engulfing pattern.
While this is a continuation pattern, the bulls or bears come in to temper the move up or down. Make sure you confirm if the move will continue (bookmark our penny stocks list and stock watch lists pages, which are updated daily).
Technicals of Three Line Strike Candlesticks Patterns
Technical analysis basics are helpful in confirming a continuation or reversal. When using stock trading strategies that work you need to make sure you’re informed about a stocks price movement.
First and foremost, candlesticks are the basis of all technical analysis. Without them tools like moving average lines or RSI wouldn’t mean anything. Candlestick real bodies and wicks provide key levels of support and resistance (try our stock picks service free for 14 days).
Coupling moving average lines with candlesticks give that extra support and resistance along with buy and sell signals. Candlesticks by themselves also give you hints and signals.
The different types of doji candlesticks like dragonfly doji candlesticks or long legged doji candlesticks give you clues. They can look alike so make sure you know what they mean. That’s more important than trying out figure out the exact formation.
Three line strike candlesticks patterns need confirmation of moves. Using candlesticks coupled with moving average lines and RSI help to give you understanding about potential moves.
We teach how to trade three line strikes on our live daily streams. Check out our trading service to learn more.
What Patterns Are They Apart Of?
Patterns are constantly forming within each other. The large patterns like triangle patterns can have an effect on the formation and breakdown of other patterns.
The medium sized patterns such as the cup and handle pattern can also make a continuation pattern actually turn into a reversal pattern. Patterns such as the three line strike candlesticks pattern could form the handle of the cup and handle and instead of continuing, reverse.
Hence the importance of being able to the big and small patterns. A three line strike candlestick pattern forming at the apex of symmetrical triangle patterns could have different outcomes. Take our free candlesticks patterns course. Also, take our candlestick reversals course.
How to Trade Three Like Strike Candlestick Patterns
- How to trade three line strike candlestick patterns:
- Watch for 1st three bearish candlesticks to form
- Next, watch for 4th large bullish candlestick to engulf 1st three bearish ones
- Then, watch for 5th candlestick to break above 4th bullish one
- Traders take a long position once price breaks above the 4th candlestick
- Place stop below the base of the 4th candle
- Some traders take a short position once price falls below 4th candle
- Then place stop above the 4th candle
Three line strike candlesticks patterns are rare continuation patterns. Don’t get caught up in the exact formation because this pattern could be seen as three white soldiers, three black crows or engulfing patterns which is probably why this is a rare pattern formation.
Using technical analysis coupled with patterns are the tools you need to be a good trader. Spend the time and put in the effort to study and then practice. You’ll like the results you see. Take our free online trading courses for beginners.