What is a 3 bar play?

Traders typically use the 3 Bar Play for short-term trades, focusing on the third bar’s size and position for entry signals and potential high-reward setups. But, you must know the factors and strategies to identify and trade the 3 bar pattern. This article will teach you how to recognize, interpret, and trade this chart pattern.

Can a pattern have 4 bars?

First off, you may be wondering why we’ve shown a few examples above with 4 bars instead of only 3. Technically, the pattern can have either. Sometimes it might have 5 bars as long as they are all intact and constructive. Yes, you’d call it a 4 Bar Play if it has 4 bars.

How do you identify a 3 bar play?

To that end, let’s look at the three main rules for identifying a 3 bar play. The first bar needs to be an “igniting” bar — a very wide range candle, ideally on high volume. The pullback bar, or bar 2 (& 3), must not exceed 50% retracement of the 1st bar and have relatively equal highs.