Advance Block Bearish Candlestick Pattern

The advance block candlestick pattern is a bearish reversal signal. This chart pattern materializes after a clear uptrend is in place. The formation consists of three white (green) candlesticks and on first glance resemble three white soldiers. However, remember that three white soldiers occur in downtrends, while the advance block occurs in uptrends. The first candlestick in the advance block formation is a long green candlestick with very little upper shadow and closes near its high. The next two candlesticks in the formation will close higher, but they both have lengthy upper shadows. These upper shadows are an early indication that the uptrend is at risk. Another thing to note is that the second and third candlestick open within the body of the preceding candle.

Advance Block Charting Example

While the advance block is classified as a bearish signal, it does not have a high probability of calling market tops. Traders should however use the advance block as an early sign to lock in profits and or move up protective stops.

Advance Block