The Advance Block candlestick pattern is a bearish reversal pattern made up of three consecutive bullish candles.
The first candlestick in this pattern is a large bullish candle.
The second candle is another bullish candle–with a smaller body– that opens within the body of the first candle but continues to move up to make a slightly higher close.
The third and final candle should open at or near the close of the second candle and move up to make a higher close. The third candle should be smaller than the preceding candles.
Although this pattern is considered a bearish reversal pattern even though it contains three bullish candles, the pattern’s formation tells a different story. The first sign that the bears are taking control lies in the fact that the candle’s tend to get smaller each time, signifying that indecision is increasing.
But even with this said, the Advance Block candle pattern can also act as a bullish continuation pattern, according to Bulkowski. His testing showed the Advance Block to act as a bullish continuation pattern 51% to 59% of the time, which is too close to random to be considered a definitive bullish or bearish signal.
So, it’s important to be aware that the Advance Block pattern can act as a bearish and bullish pattern. It’s best to place buy and sell orders at the edge of the pattern’s formation to be safe.