Bearish Side By Side White Lines
Bearish side by side white lines is a bearish continuation pattern that appears in an ongoing downtrend.
Theoretical performance: Bearish continuation
Tested performance: Bearish continuation 56% of the time
The pattern consists of three candles. The first one is bearish and followed by a positive candle that starts with a gap to the downside. The third candle opens and closes at or near the same levels as the previous candle.
These are the conditions that need to be met for a bearish side by side white line to form:
The first candlestick must be bearish, and be part of an ongoing bearish trend.
The second candlestick must gap down and end as a positive candle.
The third candle closes and opens at roughly the same levels as the previous candlestick.
This video focuses on a daily chart where in each candlestick details a single day's trading. This is most important for online trading.
Let's start bearish side by side white lines. Bearish side by side white lines consists of three candles. The black candle formed in the inclining trend is followed by two white candles. The white candles are a gap below the black candle, it happens because short position owners cover their positions real trend reversal is not expected.
The inclining trend must continue. How to identify, one...first day is a red day, two...second day is a white day which gaps below the first days open, three...third day is a white day about the same size as the second day opening at about the same price.
Psychology, the second and third days are a failed attempt to rally, shorts are basically taking profit here. The downtrend remains intact.
