Three-Line Strike (Bullish)

Published March 6, 2025 | By Ty

Three-Line Strike (Bullish): A Trader’s Guide to Spotting Trend Reversals in Stocks, Forex & Crypto

Ever wondered how professional traders predict market reversals? The Bullish Three-Line Strike candlestick pattern is one of their secret weapons. Widely used in day trading and swing trading across stocks, forex, and crypto markets, this pattern signals potential bullish turnarounds. In this guide, you’ll learn how to identify it, interpret its psychology, and trade it profitably—even in volatile markets.

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What is the Bullish Three-Line Strike Pattern?

This 4-candle pattern combines bearish exhaustion and bullish momentum reversal. Here’s how it works:

📊 Structure of the Pattern

Candle 1-3: Three consecutive bearish (red) candles in a downtrend
Candle 4: A large bullish (green) candle that closes above the first candle’s open

🧠 Market Psychology Behind the Pattern

Sellers dominate initially, pushing prices lower
Buyers stage a surprise rally, erasing prior losses
Indicates a shift from bearish capitulation to bullish conviction

How to Trade the Bullish Three-Line Strike

✅ Confirmation Signals

Volume spike on the 4th candle (+20% above average)
Alignment with support levels or Fibonacci retracements
RSI divergence showing weakening bearish momentum

⚡ Pro Trading Tips

Entry: Buy after bullish candle closes
Stop-Loss: Below the pattern’s lowest point
Take-Profit: 1:2 or 1:3 risk-reward ratio
Best Markets: More reliable in stocks than crypto (lower false signals)

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The Bullish Three-Line Strike is a powerful tool when combined with volume analysis and market context. While no pattern guarantees success, this setup significantly improves odds in trending markets. Always back test strategies in your preferred market—whether stocks, forex, or crypto—to refine your edge.