Forex Questions and Answers - FXAnswer

This pattern is formed by three adjacent white long candlesticks followed by a black candlestick driving prices back to the point where they were at the beginning of the pattern. If there was a strong bullish trend before the pattern, then it should continue.

Recognition Criteria:

1. Market is characterized by uptrend.
2. We see three consecutive long white candlesticks with consecutively higher closes.
3. Then we see a black candlestick opening at a higher level and closing below the open of the pattern’s first day.

Explanation:

Bullish Three Line Strike Pattern appears in a market characteristically in uptrend as evident in the three white candlesticks. The fourth day opens in the direction of the trend, however it then moves in opposite direction due to profit taking. There may be a reevaluation of the market direction now. However we know that this move completely eradicated the gains of the previous three days. If the previous trend was really strong, this may now be interpreted as a temporary setback caused by profit taking. The last day of the pattern shows liquidating which may now give the upward trend a new strength to continue in the previous upward direction.

Important Factors:

A confirmation on the fifth day in the form a white candlestick, a large gap up or a higher close is definitely required.

Source(s):

http://www.candlesticker.com/Cs82.asp

by

Suneetha

1 year ago

Three blue days occur in a row continuing an established bull trend.
• Each day should close higher than the previous day.
• Day-four is red candle that closes near the open of the first day


So long as the previous uptrend is an established one, candlestick analysts view the Three Line Strike formation as a sign that the downtrend may still continue.

The first three days serve as a fairly clear bullish move. Up to day-three in fact we have a Three White Shoulders formation and a strong bullish signal. One day of sell-offs that only goes down to the open price of the patterns start is considered to be more a sign that longs are covering their positions than any true sign of a reversal. Thus traders will watch for long entry opportunities to come.

Since the overall signal is fairly weak, most will want confirmation in the form of bullish price action the next day.

Source(s):

fxwords.com

by

fuji022

1 year ago

• Three blue days occur in a row continuing an established bull trend. • Each day should close higher than the previous day. • Day-four is red candle that closes near the open of the first day So long as the previous uptrend is an established one, candlestick analysts view the Three Line Strike formation as a sign that the downtrend may still continue. The first three days serve as a fairly clear bullish move. Up to day-three in fact we have a Three White Shoulders formation and a strong bullish signal. One day of sell-offs that only goes down to the open price of the patterns start is considered to be more a sign that longs are covering their positions than any true sign of a reversal. Thus traders will watch for long entry opportunities to come. Since the overall signal is fairly weak, most will want confirmation in the form of bullish price action the next day.

by

certicex

1 year ago