Three candles run in one direction, then a single fourth candle engulfs all three at once. What took three bars to build is wiped out by one. Classic theory calls it continuation, but in practice it often works as a reversal.
The Three-Line Strike is a four-candle pattern in which a single fourth candle engulfs three candles that ran in the same direction.
The bullish Three-Line Strike forms when three bearish candles fall in a downtrend, each making a lower low, and then the fourth candle opens even lower than the third, gets bought back hard, and closes above the open of the first candle. A single tall bullish candle erases three candles' worth of decline.
In classic chart analysis this pattern was, surprisingly, classified as a continuation (a resumption of the downtrend). In practice, though, the very act of erasing three bars of decline with one candle signals that the tone of the market has shifted, and it often works as the start of a reversal.
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The name "Three-Line Strike" describes the move directly: a single fourth candle strikes back against the three lines (candles) that came before. The Japanese name carries the same meaning.
The heart of the pattern lies in one point: the fourth candle fully engulfs the range of the three preceding candles in a single bar. The energy that moved in one direction over three candles gets absorbed by just one. That overwhelming strength of the strike-back is what makes the pattern special.
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