Advance Block candlestick pattern

The Advance Block candlestick pattern is a bearish reversal pattern that typically occurs at the end of an uptrend. It consists of three consecutive candlesticks with progressively shorter bodies and higher closes.

Depending on the market and the timeframe, an Advance Block is sometimes a better indicator of a bullish continuation.

The Advance Block pattern suggests that while the bulls are still in control, their strength is waning. The long upper shadow and shorter body of the 2nd candlestick indicate that the buyers are struggling to push the price higher. Yet another bullish candlestick, with an even smaller body and a longer upper shadow, closes higher, but shows even more difficulty in pushing the price higher.

Similar pattern to the Three White Soldiers. While both patterns consist of three bullish candlesticks, each opening within the body of the previous candle, the key difference lies in the size and trend of these candlesticks. Three White Soldiers indicates a strong and sustained bullish reversal, while the Advance Block indicates a potential weakening of the bullish trend.

Construction

1st

• continuation of ongoing uptrend
• green body

2nd

• green body shorter than 1st candlestick
• opening price within previous body^①
• closing price above previous closing price^②
• longer up shadow

3rd

• green body shorter than 1st and 2nd candlesticks
• opening price is within previous body^①
• closing price is above previous closing price^②
• even longer up shadow than previous candlesticks

Always wait for confirmation before making trading decisions. Additional signals or confirmation from other technical indicators can enhance the reliability of your analysis.Wait for a bearish candle following the three-candle pattern. The bearish candle serves as a confirmation of the reversal. Without it, the pattern is incomplete.

You can also use the pattern as additional confirmation of other chart patterns and technical indicators to improve the reliability of the signal.

Set a stop loss slightly above the highest price of the pattern to protect your trade against unexpected price spikes above.