Good day, dear readers, we live in a time where trading in financial markets has become possible in almost all countries around the world. Every day a new trader is trading several types of assets in the financial markets such as stocks, currencies, commodities, etc. with the dream of getting rich. Getting rich, making money, new car, vacation, all this sounds good, right? Just like in life, things may not always go smoothly in the financial markets. From beginners to the most experienced traders, everyone can have their ups and downs. But every successful trader has a unique strategy and a roadmap. So, where should we start? Well, let's start with Japanese candlesticks. Candlesticks are a necessary feature of technical analysis. We will try to present information about the "Descent Block Candlestick Pattern" in this article.
- Topic: Descent Block
- Type: Reversal
- Trend direction: Bullish
- Opposite pattern: Advanced Block
What Is the Descent Block Candlestick Pattern
The Descent Block is a member of the triple candlestick family. It belongs to the group of bullish reversal Japanese candlestick patterns. This formation consists of three red candles. Sometimes these candles appear black on older charts. When observed on charts, it is generally considered as a signal that the downtrend may reverse or the short-term price direction may change. According to technical analysts, the Bears are weakening and the Bulls are gaining strength in the market. For this reason, they refer to the Descent Block pattern as the Bullish Descent Block Pattern.
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| Descent Block Candlestick Pattern |
This pattern represents a bullish reversal signal found on price charts. It consists of three red candles most of the time during a downward move. The second or third candle might appear green in some cases. Each candle closes lower than the one before it. This sequence shows a steady slide in price.
Descent Block Key Features
- The Descent Block pattern shows three red candles with shrinking bodies.
- This pattern marks a weak move before a new price rise.
- The Descent Block pattern points to a possible floor for the stock.
- Small bodies in the Descent Block pattern show a loss of seller power.
- This topic focuses on the Descent Block.
- The Descent Block pattern is a reversal type.
- The trend direction for this pattern is bullish.
- The Advance Block is the opposite pattern.
Why Do We Call It a Descent Block
The name comes from the image of a falling climber who grabs onto different ledges to slow a drop. Imagine a stone that rolls down a steep hill but hits thick bushes at every turn. Each bush acts as a physical block. The stone loses its speed because the path is no longer clear. This is exactly what happens on the price chart. Sellers try to push the asset down into a deep valley. The first part of the fall is easy and fast. This creates the large first candle. Suddenly, the price hits a zone filled with hidden buy orders. These orders act like a series of blocks on a road. Each block forces the price to struggle more than before.
The word "descent" marks the downward trip of the market. The word "block" refers to the loss of speed caused by buyers. This name highlights a fight where the downward force meets a heavy wall. It tells us that the easy fall is over. The path is now jammed with resistance. Traders use this term to describe a crash that ran into a trap. The market gets stuck in this block before it turns back up.
Characteristics of Descent Block Candles
The three red candles in this pattern have specific shapes. The bodies get smaller with each new candle. When the end of a downtrend starts to become visible in the market, three consecutive red (or black) candlesticks are observed. The opening levels of these red (or black) candlesticks occur below the opening level of the previous candlestick, while their closing levels are above it. However, each of them closes at a lower level compared to the previous closing level.
First Candlestick
It is a normal or long red (or black) candle. This first candle opens the sequence with a long red body. It shows a period where bears hold full authority. This candle usually appears after a series of falling prices. It represents a fast drop toward a new low. No signs of a bounce exist at this stage.
Second Candlestick
The second candle shows a shift in the market flow. It has a smaller body compared to the first candle. It is often a red (or black) candle, and sometimes it can be a green (or white) candle. This candle often opens inside the range of the previous day. A long lower shadow sticks out from the bottom. This shadow proves that buyers began to push the price back up from its lows. Sellers still close the candle lower, but they lose their fast speed.
Third Candlestick
The third candle completes the pattern with a very small body. It looks much shorter than the first two candles. This candle also features a deep lower shadow. It is frequently a red (or black) candle, and occasionally it can be a green (or white) candle. Bears try to push the price down one last time but fail. The price stays near its opening level by the end of the session. This small body indicates that the downward move is now exhausted. Buyers stand ready to change the direction of the market.
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| Types of the Descent Block Candlestick Pattern |
Throughout these three red (or black) candlesticks, the bodies are gradually becoming shorter, indicating increased market indecision. Moreover, each day's candle opens within the boundaries of the previous candle's body, opening higher, while the lower shadows are getting longer. Although the closing prices of the second and third candles are lower, the difference between their closing prices is decreasing. All these signs indicate the weakening of the downtrend, making a reversal in the market inevitable.
Note. The consecutive candlesticks are commonly red (or black) in the Descent Block Pattern. However, it is true that there is a possibility for the second or third candle to be green (or white), but it is relatively rare. An example is given in the image above.
In short, a unique trait involves the body size of these candles. The first candle shows a long body. The second and third candles become smaller. You see long shadows on the bottom of these candles. These shadows show that buyers began to fight back. Sellers lose their grip on the market during this process.
Descent Block vs. Three Black Crows
These two patterns look alike but tell different stories. Three Black Crows act like a heavy stone falling through clear air. Each red candle stays large and strong. This shows that sellers have full path toward lower prices. The drop keeps its speed without any stop.
Descent Block feels like a car driving into deep mud. The first candle is long, but the next ones lose their size. Buyers act like the thick mud that slows the vehicle. You see long shadows at the bottom of these small candles. These marks show a fight against the fall.
Three Black Crows signal a path that remains open for more drops. Descent Block warns that the downward trip hit a wall. One is a sign of strength for bears. The other shows that bears are now tired.
How to Trade the Descent Block
When trading in financial markets, it is essential to identify support and resistance levels and pay attention to technical indicators before placing orders. I believe these are among the main rules of technical analysis. When trading based on the Descent Block candlestick pattern, we should wait for the completion of the pattern with the closing of the last candle. Then, setting Buy, Take Profit and Stop Loss levels would be the right approach.
- According to some traders, the Entry order is confirmed at the midpoint of the body of the last red (black) candle, and they wait for the price to exceed this point. On the other hand, some traders place a Buy order at the opening point of the last candle.
- The Stop Loss level is commonly set at the lowest shadow of the last candle. However, sometimes the closing point of the last candle is chosen.
- The Take Profit level can be set as Target 1, Target 2, Target 3, and so on. The most commonly used and reliable target, which is Target 1, is usually set at the opening price of the first red (black) candle.
Here is a live example of this in the stock "Rolls Royce Holdings ORD GBP0.20"
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| Descent Block on Rolls Royce Stock |
Success with this pattern depends on a wait for a shift in the market. You need to see a green candle after the three red ones finish. This fourth candle acts as a green light for a move up. Most people buy when the price breaks the top of the second candle. This break shows that the bears finally lost their grip.
The Deutsche Bank AG chart shows a classic reversal scenario. Sellers had full power for a long time before this pattern appeared. The candles started to shrink as the price hit a deep floor. This change warned that the sell-off reached a dead end. Once the Descent Block finished, a massive wave of buyers entered the market.
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| Descent Block Pattern on Deutsche Bank AG Chart |
This specific example at Deutsche Bank proves the power of the pattern at the bottom of a trend. The price did not just bounce but started a long-term bull run. The small candles acted like a shield that stopped the fall. Traders who saw this shield early gained a great entry point for the new trend.
The Meta Platforms chart offers a very different story. The stock was already in a healthy bullish trend. A short correction started and created a Descent Block along the way. This drop looked scary for some, but the pattern showed it was just a brief pause. Buyers used this small dip to add more to their positions.
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| Descent Block on Meta Platforms stock |
The result for Meta Platforms was a fast return to the original upward path. The Descent Block acted as a trap for the bears during a temporary pullback. It showed that the correction lacked the force to turn the whole trend around. The price shot back up as soon as the third small candle closed.
A good plan involves a stop loss below the tail of the third candle. This level marks the final line of defense for the bulls. You should look for targets at the peak where the drop first started. This way, you follow a logical path from a blocked descent to a fresh rise.
Information. However, there is also the Advance Block candlestick pattern, which is the opposite of the Descent Block candlestick pattern.
Frequently Asked Questions
This section answers common questions about the Descent Block. These points define the main rules for the pattern.