What is an Advance Block?

The advance block is a candlestick pattern that reflects a bearish reversal signal. An advance block can be seen on candlestick charts, it is a three-candle bearish reversal pattern in which the first is a large candlestick followed by two others with small structures but high wicks. All the three candlesticks are green; showing an uptrend or bullish pattern, they often lead to the continuation of a bullish trend.

How Does an Advance Block Work?

The advance block candlestick pattern is common at this present time, although it was a rare pattern before the introduction of algorithm trading. This pattern is often used to describe temporary uptrends and drawbacks within the downtrends, which are often long-termed. Typically, the advance block candlestick pattern as four major characteristics that reflects the attributes of the candlesticks. This chart pattern shows how the market is in an uptrend or in a pullback within a downtrend. Despite being a bearish reversal signal, traders are not expected to build total reliance on the advance block, as they need to take buy and sell signals from other chart patterns.