What does it look like?
This bar pattern is easy to identify.
Three consecutive bearish bars form a bullish pullback pattern, and three consecutive bullish bars form a bearish pullback pattern.
What does it mean?
When the market is trending, it is hard to sustain a counter-trend pullback. Hence, after a pullback of three bars, the trend is ready to resume.
How do we trade it?
- Within a bull trend, wait for three consecutive bearish bars. Then, buy above the next bullish bar.
- Within a bear trend, wait for three consecutive bullish bars. Then, sell below the next bearish bar.