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Trading with the Descent Block Candlestick Pattern

What is the Descent Block Candlestick and how to use it? Learn more about this Pattern that aims to identify entry and exit points and reverse trends.

Topic: Descent Block

Type: Bullish

Trend direction: Reversal

Opposite pattern: Advanced Block

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. In this article, we will try to present information about the "Descent Block Candlestick Pattern".

What is the Descent Block Candlestick Pattern?

"Descent Block" is the term given to the triple candlestick trading pattern. It is known as the reversal bullish Japanese candlestick pattern consisting of three red (black) candles. 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. In order not to miss the train, we can enter a buy order considering the market conditions. Let's look at a live example in the market on the "Deutsche Bank AG NA O.N." stock:

Bullish Descent Block Pattern illustration showing a potential buying opportunity in the stock market with Deutsche Bank AG NA O.N. live example.
Descent Block Pattern in the Stock Market

What is the structure of the Descent Block Candlestick Pattern?

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.

Learn about different types and variations of the Descent Block Candlestick Pattern in financial markets
Types of the Descent Block Candlestick Pattern

  🕯 First candlestick:

It is a normal or long red (or black) candle.

  🕯 Second candlestick:

It is shorter than the first candle and has a long shadow. It is often a red (or black) candle, and sometimes it can be a green (or white) candle.

  🕯 Third candlestick:

Its body is shorter than the body of the second candle, and a long shadow is visible. It is frequently a red (or black) candle, and occasionally it can be a green (or white) candle.

 Note. In the Descent Block Pattern, the consecutive candlesticks are commonly red (or black). 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.

How is the Descent Block Candlestick Pattern formed?

Descent Block Candlestick Pattern consists of three consecutive red (or black) candlesticks. Each candlestick opens within the body boundaries of the previous candle and closes below the closing price of the previous candle. Meanwhile, as the bodies of the three candlesticks decrease in size, their lower shadows grow. You can see this in the example image below:

The Descent Block Pattern through the illustration of three successive red (black) candles with a real-time example
Descent Block in the Meta Platforme,Inc. stock

Usually, the first candlestick is a normal or long red (or black) candle with very little or almost no shadows. Sellers dominate the market, and the downtrend continues. Next, a second red (or black) candlestick follows, closing below the closing price of the first candle. The bearish pressure is still prevailing. We now have two consecutive red (or black) candlesticks, but the second candle's body is short while its shadow is long. At this point, sellers start to become a bit hesitant. Later on, the third candle also closes below the closing price of the second candle, but it has the smallest body among the three. The appearance of a shadow on the third candle indicates the weakening of the sellers. 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.


How to trade with the Descent Block Candlestick Pattern?

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":

Learn how to use target, entry and stop loss levels in a live trade with the Descent Block Pattern for profitable outcomes
Live Trading with the Descent Block Pattern

Information. However, there is also the Advance Block candlestick pattern, which is the opposite of the Descent Block candlestick pattern.

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