How to read the advance block candlestick pattern on a chart
The advance block is a three-candle candlestick pattern traditionally interpreted as a warning that an uptrend may be losing momentum. It forms as prices continue to rise, but later candles show signs of weakening buying pressure, such as smaller bodies or longer upper shadows.
The pattern does not confirm that a reversal will occur, so traders may look at subsequent price action and other technical indicators for additional context.
Key takeaways
- An advance block consists of three rising candles with lengthening upper shadows.
- It’s classically defined as a signal that an uptrend may be losing momentum.
- The advance block is based on historical price data and does not guarantee future direction.
- A close above or below the pattern may support or invalidate the signal.
- Past performance is not a reliable indicator of future results.
What is the advance block candlestick pattern?
The advance block is a three-candle candlestick pattern that can form when the price rises over three consecutive trading periods. All three candles close higher, but smaller bodies, longer upper shadows, or both may suggest that the move is losing momentum.
After a bullish first session, each subsequent candle opens inside the previous candle’s body, trades higher and then closes further below its intraday high.
It can suggest buyers find it increasingly difficult to sustain the move, but it does not guarantee future price direction.
Past performance is not a reliable indicator of future results.
Advance block vs three white soldiers
With its origins in Japanese candlestick charts, Steve Nison describes the pattern in Japanese Candlestick Charting Techniques as a variation of the three white soldiers.
In both patterns, three rising bullish candles open within the previous candle’s body. The main differences are the upper shadows and the trend that comes before them.
- Three white soldiers can emerge after a downtrend. Each candle closes near its high with little or no upper shadow.
- The advance block may form after an uptrend. Each candle has upper shadows that grow as the pattern develops.
| Context | Advance block | Three white soldiers |
|---|---|---|
| Prior trend | Upward | Downward |
| Closes | Higher, but further below each high | Higher and near each high |
| Upper shadows | Longer on later candles | Short |
| Traditional reading | Bearish signal | Bullish reversal |
Past performance is not a reliable indicator of future results.
How to identify an advance block on a chart
An advance block forms during a rising market and contains three consecutive bullish candles. Definitions vary slightly, particularly around body size, but the main features are similar.
- Identify the uptrend. The pattern should appear after a period of sustained price rises. Three similar candles during a decline could be three white soldiers.
- Find three bullish candles with higher closes. Each candle closes above the previous one.
- Check the openings. Each candle opens inside the previous candle’s body rather than gapping above it.
- Look at the upper shadows. The second and third candles should have noticeably longer upper shadows than the first. This means the price trades higher but closes further below the session high.
Past performance is not a reliable indicator of future results.
Identifying the pattern does not confirm that a reversal will follow. Traders who use the advance block may therefore look for subsequent candles and whether they close above or below the pattern.
What does the advance block indicate?
Traditional candlestick analysis interprets the advance block as a bearish reversal pattern.
- Candles within the pattern show rising closes that continue the prior uptrend, with longer upper shadows that may indicate that buyers are losing momentum.
The pattern provides context on where the price could move next, but it shouldn’t be used in isolation and doesn’t guarantee any particular outcome.
If the price subsequently falls below the pattern or other bearish evidence develops, this may support the signal. However, if the price instead rises above the pattern’s high, the bearish setup may be weakened or invalidated.
Advance block in trading: hypothetical example
Because the advance block is a reversal warning rather than a confirmed reversal, some traders wait for further bearish price action before acting on it.
- For example, suppose the pattern forms between 61.80 and 67.20. A close below 61.80 could support the traditional bearish interpretation.
- Conversely, a sustained move above 67.20 may weaken or invalidate it.
- You might use the pattern’s high, another technical level or a stop-loss to manage risk.*
- Nearby support or resistance levels may also provide context for potential exits or areas where price could react.
- This example is hypothetical and does not guarantee how the price will move.
If the price remains within the pattern’s range, the reversal has not been confirmed. Also consider the wider trend, momentum and volume rather than relying on the candlestick pattern alone.
CFD trading involves margin. Leverage can magnify both profits and losses.
*Standard stop-loss orders aren’t guaranteed. Guaranteed stop-loss orders incur a fee if activated.
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What confirms or invalidates an advance block?
The advance block itself only identifies a potential loss of upward momentum.
- The bearish interpretation may gain more support if subsequent price action moves lower, particularly if price closes below the pattern’s range or other technical indicators also weaken.
- A move above the pattern’s high has the opposite effect. If price continues rising rather than reversing, the bearish warning has not developed as expected and may be considered invalidated.
- Price can also remain within the range without confirming either outcome. In that case, the pattern has identified a possible change in momentum but subsequent price action has yet to confirm a reversal.
In Thomas Bulkowski’s historical testing of the advance block on US stocks, the pattern acted as a bullish continuation 64% of the time, despite its traditional classification as a bearish reversal. He also found that downward breakouts, while less common, produced the strongest average moves in some market conditions. This illustrates why the appearance of an advance block alone should not be treated as evidence that price will fall (ThePatternSite.com, accessed 2 October 2026).
Bulkowski’s findings come from one historical dataset and do not redefine the pattern as bullish or predict how a future setup will behave.
Past performance is not a reliable indicator of future results.
Indicators to use with the advance block
The advance block covers only three candles. Other indicators can help assess the surrounding trend, volatility, momentum and volume.
These tools can provide additional context for the bearish reversal interpretation. They cannot confirm that a reversal will occur.
Moving averages
A moving average can show how the pattern sits within a longer trend.
If an advance block appears after an extended rise but price begins moving towards or below a relevant moving average, some traders may interpret this as additional evidence that upward momentum is weakening.
If price remains above a rising moving average, the broader uptrend may still be intact. In that case, the advance block’s bearish warning may carry less supporting evidence, although the moving average does not rule out a reversal.
Average true range (ATR)
‘Small bodies’ and ‘long shadows’ are relative terms. Average true range (ATR) helps compare each candle with recent volatility.
An upper shadow that is large relative to recent ATR may stand out more than one that only looks large on the chart. ATR measures volatility, not direction, so it does not indicate whether price is more likely to rise or fall.
Relative strength index (RSI)
If price makes higher closes while RSI makes lower highs, some traders read the divergence as a sign that upward momentum is weakening. This can provide additional context for the advance block’s traditional bearish interpretation.
If RSI continues rising with price, the momentum indicator offers less support for the idea that the uptrend is weakening.
Neither setup confirms the next move.
On-balance volume (OBV)
On-balance volume (OBV) adds volume on up days and subtracts it on down days.
- If OBV flattens or falls while price rises, some traders may see weaker participation behind the move. This may provide additional context for a potential loss of upward momentum.
- If OBV continues to rise with price, volume is still moving in the direction of the uptrend and provides less support for the bearish interpretation.
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FAQ
What is the advance block candlestick pattern?
The advance block is a three-candle pattern that forms during a rise. Each bullish candle opens within the previous candle’s body and closes higher, while the upper shadows generally become longer. Price is still rising, but the candles close progressively further below their session highs. Traditional candlestick analysis interprets this as a warning that upward momentum may be weakening and that a bearish reversal could develop. The pattern itself does not confirm that reversal.
How do I identify an advance block?
Look for three consecutive bullish candles during a rising market, with each opening inside the previous candle’s body and closing higher. The second and third candles should generally have longer upper shadows than the first. Their real bodies may also shrink, although not every definition requires this. If the candles instead close near their highs with short upper shadows, the formation may be closer to three white soldiers.
Is the advance block bullish or bearish?
The advance block is traditionally classified as a bearish reversal pattern. Its candle structure can indicate that upward momentum is weakening after a rise. However, the pattern is a warning, not confirmation that price will fall. Bulkowski’s historical test found bullish continuation in 64% of the advance blocks in his sample. This result highlights a limitation of the traditional interpretation rather than changing the pattern’s classification to bullish. Past performance is not a reliable indicator of future results.
