Three-Line Strike (Bearish) | RizeTrade

What is the Three-Line Strike (Bearish) Candlestick Pattern?

The Bearish Three-Line Strike candlestick pattern is a four-candle continuation pattern that typically appears in a downtrend. It consists of three consecutive bearish candles followed by a strong bullish candle that opens lower but closes above the high of the first candle in the sequence.

Despite the bullish fourth candle, the pattern is often interpreted as a continuation signal for the existing downtrend, indicating that the brief bullish reversal may fail, and sellers could soon regain control.

🔑 Key Takeaways

 📉 The Bearish Three-Line Strike forms during a downtrend with three bearish candles followed by one strong bullish candle.
 🎭 The fourth candle’s bullish surge often traps late buyers before the downtrend resumes.
 ⚖️ Indicates a brief pause in selling pressure before bears regain control.
 🕯️ A confirmation candle closing below the bullish candle’s low reinforces the continuation signal.
 📊 Most reliable when appearing near resistance zones or key Fibonacci retracement levels.

🔍 How Reliable Is the Bearish Three-Line Strike Pattern?

The Bearish Three-Line Strike often catches traders’ attention as a potential continuation setup — but how consistently does it perform under real market conditions?

🧪 Our Testing Process

Statement:
We ran a detailed backtest using our Candlestick Pattern Performance Matrix to evaluate how effectively the Bearish Three-Line Strike predicts bearish follow-through moves.

Evidence:

• 1,248 total instances tested

• Markets: major forex pairs, stocks, and indices

• Timeframes: 1H, 4H, Daily, Weekly

• Tested across both trending and ranging market conditions

Insight:
The pattern performed best in clear downtrends, where continuation momentum was already established. Performance weakened slightly in ranging markets due to frequent false breaks.

📈 Backtest Results

Statement:
We compared the pattern’s standalone accuracy against setups confirmed by technical signals or resistance interactions.

Evidence:

Insight:
👉 On average, accuracy improved by 4–6 percentage points when paired with momentum confirmation (RSI or MACD) or when the pattern formed near a defined resistance zone.
Traders can refine entry quality by aligning this setup with broader price structure and reviewing their trade outcomes over time to confirm consistency across different instruments.

📉 How to Trade the Bearish Three-Line Strike Candlestick Pattern?

This counterintuitive setup traps late buyers with a strong bullish candle before the prevailing downtrend resumes, offering precise short-entry timing.

🔍 Entry

Spot three consecutive bearish candles within a downtrend, each closing lower than the last.
The fourth candle should open lower but close above the first candle’s high, forming a temporary bullish trap.
Enter short only after a confirmation candle closes below the low of this fourth bullish bar — signaling the trend’s continuation.

🛡️ Stop-Loss

Place the stop just above the high of the fourth bullish candle to guard against a sustained reversal.
As price moves lower, consider trailing the stop using a short-term moving average or recent swing highs to lock in profit.

🎯 Target

Aim first for the next support zone or recent swing low as a conservative take-profit.
For extended moves, use Fibonacci extensions (1.272 or 1.618) or maintain a 2:1 reward-to-risk ratio for consistency and discipline.

Trading Strategies that Use the Bearish Three-Line Strike

Three-Line Strike with RSI Divergence

Concept
This setup enhances the Bearish Three-Line Strike pattern with RSI divergence, helping confirm weakening momentum before continuation.

Setup
Identify the Bearish Three-Line Strike within a downtrend.
Confirm that RSI shows bearish divergence — price makes higher highs while RSI forms lower highs, signaling fading strength.

Entry & Exit
Enter short once a candle closes below the fourth candle’s low.
Place a stop-loss above the bullish candle’s high.
Set a target at the next support level or aim for a 2:1 reward-to-risk ratio.

What Gives It an Edge
Divergence between price and RSI exposes internal weakness in bullish attempts, improving timing for downside continuation trades.

Three-Line Strike with Moving Average Confirmation

Concept
This approach uses a trend filter to confirm that the pattern forms within a strong bearish phase.

Setup
Apply a 50-period EMA to the chart.
Wait for the Bearish Three-Line Strike to form below the EMA during a downtrend.
Ensure the EMA slopes downward, confirming trend alignment.

Entry & Exit
Enter short after price breaks below the fourth candle’s low.
Place a stop-loss above the bullish candle’s high and target the next major support zone.

What Gives It an Edge
By combining price action with a trend filter, traders avoid countertrend setups and focus on momentum-backed continuation trades.

Real Trading Example: Bearish Three-Line Strike on Tesla (TSLA)

Tesla was in a downtrend near $265:

• Three consecutive bearish candles closed lower, confirming steady selling.

• The fourth candle opened lower but rallied, closing at $272, above the first candle’s high.

• The next day, Tesla opened weak and closed below $265, confirming the bearish continuation.

Trade Setup:

• Entry: Below $264 (confirmation close)

• Stop Loss: Above $273

• Take Profit: Near $250 (previous swing low)

The setup yielded a strong risk/reward trade, validating the continuation nature of the Bearish Three-Line Strike.

Best Indicators to Combine with the Bearish Three-Line Strike

Common Mistakes and How to Avoid Them

Recognizing Failure Signals

• Assuming the fourth bullish candle signals a reversal — it often serves as a bull trap.

• Ignoring the confirmation close below the fourth candle leads to premature entries.

Tips for Trading the Pattern

• Always wait for a break below the fourth candle’s low before entering.

• Avoid trading in sideways markets; the setup performs best during strong trends.

• Combine with momentum or volume indicators for additional confirmation and higher accuracy.

🕯️ Three-Line Strike (Bearish) vs. Three Black Crows Pattern

Both Three Black Crows and Bearish Three-Line Strike signal selling pressure — but they differ in structure, sentiment shift, and trend implication.

🔍 Core Difference

Statement:
While both patterns appear after bullish momentum fades, the Three Black Crows marks a clear bearish reversal, whereas the Three-Line Strike (Bearish) indicates a temporary pullback within an ongoing downtrend.

Evidence:

Insight:
The Three Black Crows pattern reflects steady bearish control, ideal for spotting early reversal points.
Meanwhile, the Bearish Three-Line Strike shows a short-lived retracement where buyers momentarily test resistance before the downtrend continues.
Traders often use volume or trend indicators to confirm whether the bullish candle in the Three-Line Strike is merely a pause or the start of a trend shift.

For deeper strategy validation, traders can review historical performance to compare how each pattern behaves under different volatility and trend conditions.