Charting The Markets: Three-Line Strike

Continuation Candlestick Patterns

In contrast to reverse candlestick patterns, continuation candlestick patterns indicate the strength of the current market trend, and they might hint towards a possible continuation of a given trend. When learning about these patterns, please keep in mind that most of these patterns require a concrete confirmation in the form of a subsequent candlestick.

The most popular and widely recognized continuation candlestick patterns are: 

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• Marubozu
• Three White Soldiers & Three Black Crows 
• Three-Line Strike
• Falling Three Methods & Rising Three Methods
• Mat Hold
• Upside & Downside Tasuki Gap

Today, we will be discussing the three-line strike – one of the market patterns you will be seeing rather often. 

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Three White Soldiers & Three Black Crows

Three-Line Strike

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Another valuable member of the continuation family is the three-line strike. Though this pattern is widely recognized as a continuation pattern, because it is ended by a very strong candlestick of the reversed trend, it is often similar to the stalled pattern, because it signifies a trend reversal. That being said, it all depends on the confirmation of the fifth candle in the pattern. 

‍A) Bullish Three-Line Strike

You can recognize this market pattern by noticing the following features/criteria:

• The first three candlesticks are bullish with a similar body and small shadows. 
• The fourth candlestick is bearish, and it is longer than the first three candlesticks combined.
• Each candlestick (except the fourth and last one) is closed higher than the ones that came before.
• Each candlestick is opened lower than the spot where the previous candlestick had closed (except for the fourth and last one).

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B) Bearish Three-Line Strike

You can recognize this market pattern by noticing the following features/criteria:

• The first three candlesticks are bearish with a similar body and small shadows. 
• The fourth candlestick is bullish, and it is longer than the first three candlesticks combined.
• Each candlestick (except the fourth and last one) is closed lower than the ones that came before.
• Each candlestick is opened higher than the spot where the previous candlestick had closed (except for the fourth and last one).

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An example of a three-line strike in realistic market scenarios:

We hope this Charting The Markets article has provided some insight into these common market patterns and will help you recognize, utilize, and capitalize on the three-line strike when you see it out in the wild. Stay tuned for the next addition to Charting The Markets, where we’ll discuss the rising & falling three methods 

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