What it looks like
Price is rising. Candle one is a long up candle. Candle two is a down candle that opens above candle one and closes just a little inside candle one's body, near its close. It gives back only a sliver. The pattern runs from the low of the first candle to the high of the second.
What it means
Buyers made a strong candle. Sellers then pushed back, but only just into the top of that candle. The rise paused and buyers came straight back. It says the trend is still in charge and the pause was only a rest. In a sideways market it means nothing.
How to trade it
- 1
Confirm the rise: higher highs and higher lows. Ignore the pattern in a sideways market.
- 2
Buy when price closes above the pattern's high.
- 3
Example: on the gold 1 hour chart in an uptrend, a bullish in-neck spans 16 points; a close above its high is the buy.
- 4
Stop just below the pattern's low, about 16 to 17 points in that example.
- 5
Target the next swing high or 2 times the stop.
A close below the pattern's low.
Where it works best
In an established uptrend on 15 minute and higher charts, on a pause above a level that price has just broken.
WickSpeak finds the bullish in-neck automatically on any chart and names it on the candles that made it. Next to the name it writes what the pattern is, how to trade it and what proves it wrong, in plain English. In Playbook you can use the bullish in-neck, or any of the 146 patterns, as a condition alongside up to 12 conditions on any of 12 timeframes, then backtest it on past candles with your own costs.
Common mistakes
- Calling a deep pullback an in-neck. The close must be only just inside the first body.
- Trading it without a rise behind it.
- Buying before the close above the pattern's high.
Related patterns
Questions traders ask
What does a bullish in-neck tell you?
That a rise paused for one candle and sellers could only dip just inside the prior candle. Buyers are still in charge.
How is the bullish in-neck different from bullish thrusting?
In the in-neck the down candle closes just inside the first body. In bullish thrusting it closes further in, but still above the middle. Both are traded with the trend.
Where should the stop go?
Just below the pattern's low. A close below that low proves the pattern wrong.
Is the in-neck pattern reliable?
Backtest it on your market in Playbook before trusting it. It is a continuation hint that works only inside a trend, so always wait for the close above the pattern's high and test it on your own market in Playbook.