Advance Block
Reference values based on Bulkowski's "Encyclopedia of Chart Patterns". Data is primarily from U.S. markets and may differ for other markets.
Three consecutive bullish candles similar to Three White Soldiers, but the third candle has a long upper shadow. It indicates weakening upward momentum and is known as a false pattern for Three White Soldiers. The third candle's small body and long upper shadow signify increasing selling pressure at highs. Careful attention to the upper shadow length is needed to avoid confusing it with Three White Soldiers.
Enter short at the next candle's open after the third candle confirms with a long upper shadow. Verify the shadow length is at least equal to the body.
Project the combined range of the three bullish candles downward from the third candle's close. Or target near the first candle's open.
Place a stop-loss slightly above the third candle's upper shadow high.
If volume increases on the third candle yet the upper shadow is long, it indicates strong selling pressure at highs, enhancing pattern reliability.