Up/Down Gap Side-by-Side White Lines

What Is Up/Down Gap Side-by-Side White Lines?

The up/down gap side-by-side white lines is a three-candle continuation pattern that happens on candlestick charts.

Understanding Up/Down Gap Side-by-Side White Lines

The up rendition is a large up (white or green) candle followed by a gap and afterward two additional white candles of comparable size to one another. The down form is a large down (black or red) candle followed by two white candles of comparative size. At the point when the pattern happens, which is uncommon, it is expected that the price will keep moving in the current trend heading — down or up, by and large.

The up gap side-by-side white lines is a bullish continuation pattern with the following characteristics:

The market is in a uptrend.
The main candle is a white candle.
The subsequent candle opens over the close of the principal candle (gap up).
The third candle has a real body with the very length as the second candle with an open that is at a similar level or higher than the real body of the principal candle.

The down gap side-by-side white lines is a bearish continuation pattern with the following characteristics:

The market is in a downtrend.
The primary candle is a black candle.
The subsequent candle is a white candle that opens below the close of the principal candle (gap down).
The third candle is a white candle with a real body that is similar length as the subsequent candle and opens at a similar level or lower than the real body of the main candle.

The side-by-side white lines pattern is modestly accurate in predicting a continuation of the current trend, however it is to some degree remarkable. A continuation happens 66% of the time. The pattern doesn't necessarily in every case produce large price moves. Somewhat more than 60% of the patterns delivered a 6% average move in 10 days, and those patterns occurred in downtrends with a downside breakout from the pattern (downtrend continuation). Patterns happening in different settings didn't have price moves as large, as per Thomas Bulkowski's candlestick research.

Other chart patterns or technical indicators ought to be utilized to affirm the candlestick pattern to augment the chances of progress.

Numerous traders opt to sit tight for confirmation from the pattern. Confirmation is price movement that affirms the expectation of the pattern. For instance, following an up gap side-by-side white lines pattern, a trader might trust that the price will move over the highs of the pattern before starting a long position. A stop loss could then be set below the low of the second or third candle or even the principal candle to give the trade more room.

The difference between up/down gap side-by-side white lines and a three outside up/down candlestick pattern is that, not normal for the former pattern, the last option is a reversal pattern, not a continuation pattern. In the outside up pattern, a black candlestick is followed by two white candles. In the outside down pattern, a white candle is followed by two black candles.

Up/Down Gap Side-By-Side White Lines Psychology

Up — Suppose the security is taken part in an uptrend, with sure bulls anticipating higher prices. The primary candle shows a rally with a large real body and a close higher than the open. Bull confidence increments further on the subsequent candle, with an up gap and positive intraday price action that holds a higher high into the closing bell. Bullish purpose is tried on the third candle, which opens with an initial drop into the opening price of the subsequent candle. Be that as it may, the decline neglects to gain traction and purchasers lift the security back to the high of the second candle by the close. This uncovers lessening bear power, raising chances for a rally and new high on the next candle.
Down — Suppose the security is taken part in a downtrend, with certain bears expecting lower prices. The main candle posts an auction bar with a large real body and a close lower than the open. Bear confidence is shaken on the subsequent candle, with a down gap and strong intraday price action that holds below the gap into the closing bell. Bearish determination develops on the third candle, which opens with a down gap into the opening price of the subsequent candle. Indeed strong intraday price action neglects to puncture gap resistance. This uncovers reducing bull power, raising chances for a decline and new low on the next candle.

Up Gap Side-By-Side White Lines Example

The Apple Inc. (AAPL) daily chart shows an illustration of the up gap adaptation of the candlestick pattern.

Falling off a swing low, the price has a large up candle followed by a gap and afterward two extra side-by-side up candles. The next day (fourth candle), the price kept on rallying, moving over the high of candles two and three. This gave confirmation that the uptrend was continuing. The rally endured a couple of additional days before floating sideways.

Up/Down Gap Side By Side White Lines Limitations

The pattern is intriguing, and that means finding it and opportunities to utilize it will be limited.
The pattern has moderate unwavering quality, and that means that in a perfect world the candlestick pattern ought to be combined with different forms of analysis and confirmed by other trade signals.
Following the pattern, the pattern that would in general deliver large price drops was the down gap rendition happening in a downtrend.
The pattern acted as a downtrend continuation pattern.
This pattern, and candlestick patterns by and large, don't give a price target. It really depends on the trader to decide when they will exit a beneficial trade. Waiting for price confirmation following the pattern is suggested.

Highlights

The down variant is a black candle followed by a gap down and two white candles of comparable size.
The up form is a white candle followed by a gap up and two white candles of comparative size.
The pattern has moderate dependability in terms of the trend continuing after the pattern, yet regularly the price move after the pattern will be quieted, showing it's anything but a highly huge pattern.
The pattern is a continuation pattern, meaning the price is expected to move toward the trend (first candle), following the pattern.
The up/down gap side-by-side white lines is a three-candle continuation pattern that happens on candlestick charts.