Pattern Detail

Bearish Breakaway

Five-candle bearish reversal: a long up candle, a gap up, two more bars drifting higher, then one down candle that drops back into the gap.

Shown only on the markets where this pattern occurs.

This pattern did not fire often enough on this market and timeframe to measure. Try a lower timeframe or a more active instrument.

A breakaway is a runaway rally that gets reeled back in. A long up candle leads, then the market gaps up and two more bars drift higher, stretching the advance. The fifth candle is a single strong down candle that drops all the way back into the opening gap. The far end of the move snaps back, signaling the run has gone too far and is turning over.

How to spot it

  • The market is rising into the pattern.
  • The first candle is a long up (green) candle.
  • The second candle gaps up above the first.
  • The third and fourth candles keep drifting higher, each reaching above the one before.
  • The fifth candle is a strong down (red) candle that closes back inside the gap, below the second candle’s open but still above the first candle’s close.

The psychology

The first four bars are a rally getting carried away. A long up candle leads, then price gaps up and two more bars drift higher, each one reaching above the last. Buyers are clearly in charge, but the move is stretching. The gap and the steady climb above it leave a lot of fresh longs sitting on gains and a lot of open air below, with no buyers parked there to catch a fall.

The fifth candle is where the mood breaks. A single strong down bar drops all the way back into the opening gap, erasing the last few sessions of advance in one stroke. That far end of the run, the part that looked most stretched, snaps back the fastest. Everyone who bought into the drift higher is now offside, and as price slides back toward the gap some of them sell to get out, which feeds the move. The buyers who powered the rally have lost their grip, and the run that went too far has turned over.

A sharp snap back after an overstretched run hints at a top, and the data below measures how often it delivers one.

Does it actually work?

A pattern is a setup, not a trade, so the honest question is not “did it win” but “how much room did it tend to offer before it was proven wrong.” The tabs below answer that across five futures markets (Nasdaq, S&P 500, gold, crude oil, natural gas) and seven timeframes from one minute to one day.

For each occurrence we measure the room the move offered in units of the pattern’s own risk, then set it against what a random entry on the same market would have done. When the pattern offers more room more often than chance, that shows up as a real edge. When it does not, the page says so plainly.

Read it with the sample size in view. On the faster timeframes a pattern can fire thousands of times, enough to trust. On the daily chart it is far rarer, so treat those numbers as a hint rather than a verdict. Thin samples are flagged for you on the page.

How we measured it

  • Entry is the close of the final candle of the pattern.
  • One unit of risk, 1R, is the distance from that close up to the pattern’s invalidation point: the highest high of the 5 candles that form it. If price trades through there, the setup is wrong.
  • We then follow the next 20 bars and record how far price ran in your favor, in multiples of that risk, before the stop was hit.
  • Every figure is set against a random entry on the same market and timeframe, so the market’s own drift is accounted for.
  • No profit target and no position sizing. Where you take profit is a strategy choice; this measures only the room the pattern tends to give.

What this page does not cover

  • Volume on the pattern’s candles.
  • Whether the pattern forms at a meaningful resistance level.
  • Pairing it with a trend filter or a confirming signal.
  • A profit target or position sizing. We use the pattern’s own invalidation point as the stop to define risk, but where you take profit, and how much you put on, are strategy decisions this page leaves to you.

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