Dear Traders,
I believe you will be happy to take a
step into the field of financial trading one day. With your dedication to
learning and multiple practices, you will succeed in this field and achieve
financial freedom. The journey from being a beginner trader to an experienced
one will make you proud. To succeed, you must be patient and learn to
thoroughly analyze candlestick patterns that you will frequently encounter in
technical analysis. One of these patterns is the "Down Gap Side By Side
White Lines" candlestick pattern.
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| Down Gap Side By Side White Lines |
- Topic: Down Gap Side By Side White Lines
- Type: Bearish
- Trend direction: Continuation
- Opposite pattern: Up Gap Side by Side Black Lines
What is the "Down Gap Side By Side White Lines"
candlestick pattern?
"Down Gap Side By Side White Lines", a mostly
bearish formation that indicates a continuation of a downtrend. This pattern is
easily noticeable in a bear market and usually shows that prices are in a continuous
downtrend. Bears become dominant in the market and buyers are unable to
effectively counter this situation. As a result, a downward gap is seen,
followed by a short pause, and the price decline continues. Although rare, it
can also signal a pullback or reversal in a downtrend.
How is the candlestick pattern "Down Gap Side By
Side White Lines" formed?
The Down Gap Side By Side White Lines is a three-candle
candlestick pattern. This pattern usually occurs in a bear market and indicates
that the bears are becoming more aggressive. Here are the elements that stand
out when looking closely at the pattern structure:
First bearish candle: The first candle forms in a bearish
direction. It may be red in color and have a long body. This candle is a
typical representative of the bearish trend.
Downward gap: Following the first candle, a downward gap
appears. This gap reflects the aggressive behavior of bears in the market.
Side by side white candles: Below the downward gap, two
bullish candles form. However, the closing of these two green (white) candles
cannot exceed the top of the gap. The twin bullish candles can sometimes have
the same length of body, while other times they may differ in length.
So, the pattern structure includes a bearish candle, a
downward gap, and two white (green) candles. As this formation completes, the
inability of the twin white candles to overcome the gap indicates that bulls
cannot mount a strong response against the weight of bears. Consequently, the
downtrend continues.
How to trade the "Down Gap Side By Side White
Lines" candlestick pattern?
Let's say you've spotted the "Down Gap Side By Side
White Lines" pattern on a price chart. Instead of immediately deciding to
open a short position, we should not overlook the importance of confirmation.
If this candlestick pattern forms in a strong bearish trend, it further
validates the signal. Now let's give an example of this. In the following
British Pound Index chart, the "Down Gap Side By Side White Lines"
candlestick pattern appears, signaling that prices will continue to fall in the
downtrend:
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| Down Gap Side By Side White Lines on British Pound Index. |
Sell (Short): You can enter a sell order below the closing
price of the third white (double candle) candlestick.
Stop Loss: A stop loss can be placed near the high of the
first bearish candlestick.
Target: Target levels can be determined using technical
analysis tools such as previous support levels or Fibonacci retracement levels,
where the trend is likely to continue.
Remember: This is just an example, and there are risks involved in every trade. The "Down Gap Side By Side White Lines" candlestick pattern can give misleading signals when used alone. Before trading, you should conduct your own research and assess how prepared you are for the risks.