Three-Line Strike Patterns
Overview
The three-line strike is a four-candle pattern where three consecutive candles move in one direction, followed by a single large candle that engulfs all three. Despite appearing as a reversal, statistical analysis shows the bullish three-line strike actually has a high probability of continuing the prior uptrend, making it a continuation signal. The bearish variant behaves similarly as a continuation of the downtrend.
Key Concepts
Three consecutive candles of the same colour establish directional momentum. The fourth candle opens in the direction of the trend but reverses to engulf all three prior candles. The bullish version statistically acts as a continuation pattern despite the bearish fourth candle. Volume analysis on the fourth candle helps distinguish continuation from genuine reversal. Context within the broader trend structure is essential for correct interpretation.
Entry Signals
Enter in the original trend direction after the fourth candle's engulfing move completes. Wait for the next candle to confirm continuation of the prior trend. Look for the pattern within an established trend, not at extremes. Volume should decrease on the strike candle relative to the trending candles.
Exit Signals
Stop beyond the extreme of the strike candle. Target the next measured move in the trend direction. Exit if the strike candle's level is decisively broken with follow-through. Partial profit at the prior swing high or low.
Best Timeframes
4H, Daily
Pro Tips
The three-line strike is counterintuitive because the large engulfing candle looks like a reversal, but research across over fifty thousand occurrences shows it acts as continuation roughly eighty-three percent of the time in uptrends. Always consider the broader trend context and avoid trading the pattern in ranging markets where continuation statistics break down.
More Topics in This Category
Abandoned Baby Pattern
The abandoned baby is a rare three-candle reversal pattern considered one of the most reliable candlestick signals. It forms when a doji gaps away from the preceding candle and the following candle gaps in the opposite direction, leaving the doji isolated with gaps on both sides. The pattern indicates a dramatic shift in market sentiment where momentum completely reverses between sessions.
Inside Bars
An inside bar is a candle completely contained within the range (high to low) of the previous candle. It represents a contraction of volatility and indecision. Inside bars are used as breakout setups — traders wait for price to break above or below the inside bar's range (or the 'mother bar' range) to enter.
Engulfing Patterns
A bullish engulfing pattern occurs when a large green candle completely engulfs the prior red candle near the bottom of a trend. A bearish engulfing is the opposite — a large red candle swallows the prior green candle at the top. Engulfing patterns are among the most reliable two-candle reversal signals.
Three White Soldiers / Black Crows
Three white soldiers are three consecutive large bullish candles with progressively higher closes, each opening within the prior candle's body. Three black crows are the bearish equivalent. These patterns signal strong momentum shifts and conviction from buyers (soldiers) or sellers (crows).