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Three bullish candles that tell a bearish story - shrinking bodies and growing shadows show momentum dying.
The Advance Block is a three-candle bearish reversal pattern that appears during an uptrend. It consists of three consecutive bullish candles, but each successive candle shows weakening momentum — shorter bodies and longer upper shadows.
While Three White Soldiers represents strong bullish continuation, the Advance Block is its warning cousin. The pattern looks bullish at first glance (three green candles), but the shrinking bodies and growing upper wicks reveal that buyers are losing steam with each new high. Sellers are beginning to step in at higher prices.
The Advance Block reveals creeping bearish pressure beneath a bullish surface. Candle 1 is a strong bullish candle — no issues, the uptrend is healthy. Buyers are in control and close near the high.
Candle 2 opens within Candle 1's body and closes higher, but the body is smaller and an upper shadow appears. Bulls are still pushing higher but encountering resistance. Some sellers are defending these levels. The body is shorter because the close was pulled back from the high.
Candle 3 continues higher but the body shrinks further and the upper shadow grows even longer. This is the tell — buyers push price up intraday but sellers keep rejecting the highs. The diminishing bodies show decaying bullish momentum. A reversal or correction is likely.
Conservative: Wait for bearish confirmation (next candle closes below Day 3's low).
Aggressive: Enter short at close of Day 3 with tight stop.
Above the high of the third (smallest) candle. If buyers can push above that high, the bearish signal is negated.
T1: The open of the first bullish candle in the pattern. T2: Previous support level or swing low. The pattern signals weakening momentum rather than aggressive reversal, so conservative targets work best.
Minimum 1:1.5. Advance blocks suggest fading momentum rather than sharp reversals, so don't overextend targets.
The Advance Block is a subtle warning pattern. Unlike dramatic reversals, it shows the gradual deterioration of buying pressure. Many traders miss it because they see three green candles and assume bullish continuation.
Three bullish candles with decreasing body sizes and increasing upper wicks. Classic exhaustion pattern.
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