Continuation Candle Patterns

Below you can find diagrams and explanations of the most common candle continuation patterns.

Continuation of an upward trend

Bullish Tasuki Gap (Upside Tasuki Gap). A bullish candle forms after a gap from the previous white candle. The next candle opens higher and closes lower than the previous one.

If the gap has not been filled, the bulls have maintained control and it is possible to enter a buy trade or increase an existing long position. If the gap has been filled, the bullish momentum has ended.

Bullish Gap Three Methods (Upside Gap Three Method). This pattern is very similar to the Bullish Tasuki Gap. The pattern occurs in a strongly trending market. In an uptrend, a gap occurs between 2 bullish candles.

The last day opens within the body of the upper bullish candle and closes within the body of the lower bullish candle, filling the gap between the two candles.

Three Bullish Methods (Rising Three Methods). After a long candle, there are a series of small bearish candles. The optimal number of these retracement candles should be 3, although 2, 4 or 5 correction candles can also be observed. It is important that these bearish candles do not close below the opening level of the first large bullish candle.

Their shadows should also not go below the opening of the bullish candle. The final candle of the formation should open in the body of the last bearish retracement candle and close above the first large bullish candle. If you are familiar with chart patterns, you will notice that this pattern looks a lot like a bull flag. The logic of the two patterns is the same: the market corrected lower after a strong advance, but then buyers prepared to resume the price increase.

Mat Hold. After a large bullish candle, there is a gap followed by a series of small bearish candles. The second or third of them dips into the body of the large bullish candle. The final candle of this pattern opens higher and continues its upward movement to close above the trading range of any of the previous periods. This is a good point to add to bullish positions.

During the correction days, unlike the “Three Bullish Methods”, the price remains near the top of the range of the first bullish candle. The “Mat Hold” candlestick pattern is a stronger continuation pattern than the “Three Bullish Methods”.

Triple Strike (Three Line Strike). After the 3 strong bullish candles that close progressively higher and indicate that the uptrend continues (the so-called “3 White Soldiers”), there is a large “hit” candle that opens higher, but then retraces to close below of the opening of the first bullish candle.

Make sure the first 3 candles are at least average size. If they are small or doji, the pattern will not be reliable. All in all, the “Triple Strike” pattern means that the strike candle is a temporary correction and that after that, the trend will resume in the direction of the first 3 candles.

A bearish “Triple Strike” pattern is the mirror of a bullish one. It consists of 3 strong bearish candles that close progressively lower and are followed by a single bullish “hit” candle. The strike candle should open lower than the close of the third candle and close above the open of the first candle.

Separating Lines. The pattern must take place during an uptrend. It consists of a long bearish candle followed by a long bullish candle, which opened at the same level as the bearish candle did (there is a gap there that can be seen on smaller time frames). The bullish candle should be without a lower wick. Although they share the same opening price, the two candles are separated because they move in opposite directions.

The pattern means that although the sellers were able to take control of the market, it was only for a short period of time and then the buyers became even stronger than before. The longer the candles in the bullish “Separation Lines” pattern, the more reliable it will be. However, it is always safer to wait for confirmation in the form of another bullish candle after the pattern.

Continuation of a bearish trend

Downside Tasuki Gap (Downside Tasuki Gap). Look for a gap between the two bearish candles. The next candle should open and close higher than the previous one.

If the gap has not been filled, the bears have remained in control. This means it is a good time to open or increase a short position. If the gap has been filled, then the bearish momentum has ended.

On Neck Line. The first bearish candle opens with a gap down and has a long body. The second candle is bullish and reaches only the previous day’s low, not its closing level.

The pattern means that although the bulls try to take power, they fail to raise the price enough, so the downtrend continues after a brief bullish correction.

In the Neck Line (In Neck Line). The pattern is similar to the “Above the Neckline” pattern, except that it closes at or slightly above the previous day’s close. The “At the Neck Line” pattern indicates that there was some short covering, but the direction of the trend did not change and remained bearish.

Dynamic (Thrusting). This pattern resembles the “Above the Neck Line” and “At the Neck Line” patterns, except that the bullish candle closes near, but slightly below, the midpoint of the previous day’s black body.

Three Bearish Methods (Falling Three Method). After a long bearish candle, there is a series of 2-5 small bullish candles. It is important that these bullish candles do not close above the open of the large bearish candle. Their shadows should also not exceed the opening of the bearish candle. The final candle of the formation should open in the body of the last bullish candle and close below the first close of the large bearish candle.