As of 10/29/2020
  Indus: 26,659 +139.16 +0.5%  
  Trans: 11,184 +237.90 +2.2%  
  Utils: 868 +2.32 +0.3%  
  Nasdaq: 11,186 +180.72 +1.6%  
  S&P 500: 3,310 +39.08 +1.2%  
YTD
-6.6%  
 +2.6%  
-1.3%  
 +24.7%  
 +2.5%  
  Targets    Overview: 09/29/2020  
  Up arrow29,300 or 27,400 by 11/01/2020
  Up arrow12,000 or 11,000 by 11/01/2020
  Up arrow915 or 840 by 11/01/2020
  Up arrow12,800 or 11,300 by 11/01/2020
  Up arrow3,700 or 3,400 by 11/01/2020
CPI (updated daily): Arrows on 10/23/20
As of 10/29/2020
  Indus: 26,659 +139.16 +0.5%  
  Trans: 11,184 +237.90 +2.2%  
  Utils: 868 +2.32 +0.3%  
  Nasdaq: 11,186 +180.72 +1.6%  
  S&P 500: 3,310 +39.08 +1.2%  
YTD
-6.6%  
 +2.6%  
-1.3%  
 +24.7%  
 +2.5%  
  Targets    Overview: 09/29/2020  
  Up arrow29,300 or 27,400 by 11/01/2020
  Up arrow12,000 or 11,000 by 11/01/2020
  Up arrow915 or 840 by 11/01/2020
  Up arrow12,800 or 11,300 by 11/01/2020
  Up arrow3,700 or 3,400 by 11/01/2020
CPI (updated daily): Arrows on 10/23/20

Bulkowski on the Bullish Three-Line Strike Candle Pattern

 

Bullish Three-Line Strike Candlestick: Summary

The bullish three-line strike candlestick pattern is another rare candle with decent performance. The few samples found, 69, may be the reason why the pattern works so well.

Often, the best performing candles are those that you can't find (they don't occur frequently), and since you can't find them, reliable testing is impossible. Drawing conclusions from what appears to be top-rated performance is risky and should be avoided. In other words, this candle doesn't perform as well as the numbers suggest.

Theory says that this candle is bullish, but since the last candle line takes price below the open of the first candle, I really don't see how that is bullish. I found that the pattern acts as a bearish reversal 65% of the time. The reason for the comparatively high reversal rate is because price closes near the bottom of the candlestick pattern and all a reversal has to do it post a close below the bottom of the candle pattern. That is much easier to do than close above the other end (the top).

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My book, Encyclopedia of Candlestick ChartsEncyclopedia of Candlestick Charts book., pictured on the left, takes an in-depth look at candlesticks, including performance statistics.

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-- Tom Bulkowski

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Important Results
Discussion
Identification Guidelines
Three Trading Tidbits
Example
See Also

Bullish Three-Line Strike Candlestick: Important Results

Theoretical performance: Bullish continuation.
Tested performance: Bearish reversal 65% of the time
Frequency rank: 95
Overall performance rank: 2
Best percentage meeting price target: 50% (bear market, down breakout)
Best average move in 10 days: 16.91% (bear market, up breakout)
Best 10-day performance rank: 1 (bear market, up breakout)

All ranks are out of 103 candlestick patterns with the top performer ranking 1. "Best" means the highest rated of the four combinations of bull/bear market, up/down breakouts.

The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

The ideal bullish three-line strike candlestick
Bullish Three-Line Strike

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Bullish Three-Line Strike Candlestick: Discussion

Theory differs from actual behavior for the bullish three-line strike candlestick pattern. It is supposed to act as a bullish continuation, but it actually is a bearish reversal. With a frequency rank of 95, you will not find many of them in your lifetime. However, the overall performance ranks 2 where 1 is best. That is likely due to the low sample count.

The best average move in 10 days averages 16.91%. When 6% is considered good, a 16.91% rise is huge!. It is also due to just two patterns. Thus, do not expect to achieve anywhere near that kind of return in 10 days. That high number also accounts for the best 10-day performance rank of 1, which occurred in a bear market after an upward breakout.

Bullish Three-Line Strike Candlestick: Identification Guidelines

CharacteristicDiscussion
Number of candle linesFour.
Price trend leading to the patternUpward
ConfigurationLook for three white candles each with a higher close. A tall black candle should open higher, but close below the open of the first candle.

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Bullish Three-Line Strike Candlestick: Three Trading Tidbits

If you want a few bones from my Encyclopedia of candlestick charts book, here are three to chew on. The pages refer to the book where the tips appear.

  1. Trade tall bullish three-line strike candlestick patterns in a bear market for the best performance -- page 768.
  2. After a downward breakout from a bullish three-line strike candlestick pattern in an uptrend, wait 3 days before selling. -- page 770.
  3. Volume gives performance clues -- page 769.

The bullish three-line strike candlestick on the daily scale

Bullish Three-Line Strike Candlestick: Example

The daily chart shows a bullish three-line strike candlestick pattern. Price forms three white candles, each with a higher close, in an upward price trend. A black candle opens higher but price plummets so that it closes below the opening price of the first candle. The next day, price gaps open lower and closes lower still, staging a downward breakout.

This bullish three-line strike candlestick pattern acts as a bearish reversal of the upward price trend. That disobeys candle theory which says that this candlestick pattern acts as a continuation of the prevailing price trend.

-- Thomas Bulkowski

 

Top of page More

See Also

 

Support this site! Clicking any of the books (below) takes you to Amazon.com. If you buy ANYTHING while there, they pay for the referral.

My novels:  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

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