Three Line Strike Candlesticks Patterns
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.
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What Are Three Line Strike Patterns?
A three line strike pattern consists of four candlesticks that form near support levels. They start with three bearish candlesticks and then the fourth bullish candlestick engulfs the three bearish ones. Typically, this causes a bullish reversal pattern.
The three 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.
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.
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 candlestick 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.
How to Trade Three Like 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