The bullish Breakaway candlestick pattern sticks true to its name in that acts as a bullish reversal signal around 60% of the time. The Breakaway pattern is a five candle pattern that is fairly difficult to find on any time frame. This is most likely due to the number of candles and its requirements.
This candlestick pattern is found in the context of a downtrend.
The first candle is a large full bodied bearish candle.
The next candle is another bearish candle that gaps below the body of the first candle. This second candle is usually smaller. Note that the wicks of the first two candles can overlap but the open and closing prices cannot meet.
The third candle can be bullish or bearish and can be of any size. But this candle must make a lower close in comparison to its preceding candlestick.
The fourth candle is another bearish candle that should form a lower close.
The fifth and final candle is a regular sized bullish candle that must close within the gap formed by the first two candles.
The Breakaway candlestick pattern is pretty hard to find on most time frames, but especially on the higher time frames. It can be so rare in fact, that Bulkowski didn’t have enough data to provide performance statistics in his book, The Encyclopedia of Candlestick Charts.
Even though this candlestick pattern is called the Breakaway, it’s actual breakout after the pattern’s formation is middle-tier, but it can be fairly reliable so if you do spot this pattern in a downtrend, look to take a trade to the upside.
Also keep in mind that price tends to consolidate before the actual breakout occurs.