What it is
The Deliberation pattern is a three-candle bearish reversal signal that appears during an uptrend. It consists of two strong bullish candles followed by a small-bodied third candle (often a spinning top or doji) that opens near the second candle's close.
Deliberation is the weaker cousin of the Advance Block. While the Advance Block shows gradually shrinking bodies, Deliberation has two strong candles and then a sudden stall — the third candle 'deliberates,' showing that the market has suddenly become undecided at the top.
The psychology
Deliberation captures the exact moment when bullish conviction evaporates. Candles 1 and 2 are strong — long bullish bodies, closing near their highs. The uptrend looks healthy and there's no sign of weakness.
Then Candle 3 appears. It opens near Candle 2's close but barely moves. The body is tiny — a spinning top or doji. After two candles of strong momentum, the market suddenly freezes. Buyers and sellers reach equilibrium at the top.
This abrupt shift from strength to indecision is the warning. When a trending market suddenly stalls, it often means the easy money has been made. The small third candle represents traders 'deliberating' — unsure whether to continue buying or take profits. Bearish confirmation on the next candle validates the reversal.
Identification
- 01Prior uptrend — Must appear during a rise
- 02Two strong bullish candles — Candles 1 and 2 have long bodies, closing near highs
- 03Small third candle — Candle 3 has a very small body (spinning top or doji)
- 04Candle 3 opens near Candle 2's close — No significant gap
- 05Third candle may gap slightly — A small gap up is acceptable
- 01Candle 3 is a doji — Maximum indecision
- 02Declining volume on Candle 3 — Participation drops at the top
- 03Bearish confirmation candle follows (Candle 4 closes lower)
- 04At major resistance — Pattern at a meaningful level
- 01Third candle has a large body — Not deliberation if there's conviction
- 02First two candles are weak — Needs strong momentum before the stall
- 03No prior uptrend — Needs trending context
- 04All three bodies similar size — That's more likely Three White Soldiers
Execution framework
Conservative: Wait for bearish confirmation (next candle closes below Day 3).
Aggressive: Enter short if Day 4 opens below Day 3's close.
Above the high of the third (small) candle. If price pushes above this, the stalling signal is negated and the uptrend may continue.
T1: Open of the first candle in the pattern. T2: Previous support or swing low. Deliberation shows hesitation, not aggressive reversal, so targets should be moderate.
Minimum 1:1.5. This is a hesitation signal - wait for confirmation before taking full size.
Context matters
Deliberation is a warning pattern rather than a confirmed reversal. It says: 'momentum has stalled.' It always requires bearish confirmation on the next candle to be actionable.
- 01At major horizontal resistance
- 02After an extended rally without pullbacks
- 03When the third candle is a doji
- 04Declining volume on the third candle
- 05With bearish divergence on RSI
- 06On daily or higher timeframes
- 01In a powerful uptrend with no resistance
- 02If the small candle is just a brief pause in a strong trend
- 03On low timeframes where small candles are common
- 04Without bearish confirmation on Candle 4
- 05If volume is increasing through all three candles
- 06Early in a trend (momentum still building)
Three bullish candles where the third is a small doji or spinning top. Shows the rally is losing momentum.
Compare the full pattern set
Use the library to compare similar structures before deciding what the chart is actually building.