Bearish Separating Lines Candlestick Pattern: (Statistics, Facts, & Historical Backtest)
The Bearish Separating Lines is a rare bearish continuation pattern. It starts with a relatively strong bullish candle, followed by a strong bearish candle, whose opening price is at the same level as the opening price of the previous bullish candlestick.
As a trader, it’s important to stay up-to-date on various candlestick patterns that can help you interpret the charts more accurately. One such pattern is the bearish separating lines, which signals a potential trend continuation. In this article, we’ll delve into the ins and outs of this pattern, including the psychology behind it and how you can trade it correctly whenever they appear on your charts.
What is Bearish Separating Lines pattern trading?
The Bearish Separating Lines is a candlestick pattern that consists of two candles. The first candlestick is a long bullish candle, which indicates that buyers were in control and prices rose significantly during the period.
If we look at a chart, we have a couple of patterns below:
The second candlestick is a long bearish candle, which suggests that sellers took control and pushed prices down significantly. The two candlesticks should be approximately the same length and open at about the same price. Lastly, the second candle should open below the first candle’s opening and close below its low.
The Bearish Separating Lines pattern is seen as a bearish continuation pattern. Although, the first candle indicates that the downtrend is losing momentum and that the balance of power is shifting from sellers to buyers. This momentum is usually short-lived, and prices will ultimately trend lower in continuation of the downtrend.