What it looks like
Price is rising. Candle one is a long up candle. Candle two is a small down candle that opens above candle one and closes at, or almost exactly at, candle one's high. It barely gives anything back. The pattern's high is the top of the second candle and its low is the bottom of the first.
What it means
Buyers drove a strong candle. Sellers then had a turn and could only push price back to the first candle's high, not into its body. 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 market is rising, with higher highs and higher lows. Skip it if price is moving sideways.
- 2
Wait for price to close above the pattern's high, then buy.
- 3
Example: on the US30 15 minute chart in an uptrend, a bullish on-neck spans 55 points; the buy comes on a close above its high.
- 4
Place the stop just below the pattern's low, about 55 to 60 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 a clean uptrend, on 15 minute and higher charts, especially just after price has broken above a level and is pausing above it.
WickSpeak finds the bullish on-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 on-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
- Reading the down candle as the start of a fall and selling it.
- Using it in a range with no rise behind it.
- Buying before price closes above the pattern's high.
Related patterns
Questions traders ask
What does a bullish on-neck pattern mean?
It means a rise paused for one weak candle and buyers held control. The small down candle could only reach the first candle's high, so the trend is still in charge.
Is the on-neck pattern bullish or bearish?
The classic on-neck is bearish and appears in a fall. The bullish on-neck is its mirror in a rise. Both are continuation patterns traded with the trend.
Where is the stop on a bullish on-neck?
Just below the pattern's low. A close below that low proves it wrong.
Can I trade the bullish on-neck in a sideways market?
No. It only says a trend is continuing, so without a rise behind it the pattern means nothing.