CDL_THRUSTING (Thrusting Pattern)

Overview

The Thrusting pattern is a two-candle bearish continuation pattern that appears during a downtrend. It consists of a long black candle followed by a white candle that closes above the first candle's low but well below its midpoint. This pattern indicates a failed rally attempt where buying pressure is insufficient to reverse the downtrend, suggesting continuation of the bearish move. The Thrusting pattern is less bearish than the In-Neck and On-Neck patterns but still signals downtrend continuation.

Parameters

Parameter	Type	Default	Description
open	Array	Required	Array of opening prices for each period
high	Array	Required	Array of high prices for each period
low	Array	Required	Array of low prices for each period
close	Array	Required	Array of closing prices for each period

Parameter Details

Note: Array elements should be ordered from oldest to newest (chronological order)

open - Array of opening prices for the analyzed time series - Must have the same length as high, low, and close arrays - Used to determine candle body size and direction

high - Array of high prices for each period - Used to identify the upper range of price movement - Helps validate pattern structure

low - Array of low prices for each period - Critical for pattern identification - Establishes the support level reference

close - Array of closing prices for each period - Key for determining the "thrusting" level (above low, below midpoint) - Essential for pattern recognition

Usage

Basic Usage

require 'sqa/tai'

# Example price data showing downtrend with Thrusting pattern
open =  [50.00, 48.50, 47.00, 46.50]
high =  [50.20, 48.80, 47.30, 47.50]
low =   [48.30, 46.90, 46.50, 46.40]
close = [48.50, 47.00, 46.50, 47.00]

pattern = SQA::TAI.cdl_thrusting(open, high, low, close)

puts "Pattern signal: #{pattern.last}"
# 0 = no pattern, -100 = bearish continuation

Analyzing Pattern Signals

# Monitor for bearish continuation signals
pattern.each_with_index do |signal, idx|
  if signal == -100
    puts "Bearish Thrusting pattern at index #{idx}"
    puts "Price: #{close[idx]}, downtrend continuation expected"
  end
end

Combining with Trend Analysis

# Use with multiple indicators for confirmation
require 'sqa/tai'

pattern = SQA::TAI.cdl_thrusting(open, high, low, close)
ma50 = SQA::TAI.sma(close, 50)
rsi = SQA::TAI.rsi(close, 14)

current_signal = pattern.last
current_price = close.last

if current_signal == -100 && current_price < ma50.last && rsi.last < 50
  puts "Thrusting pattern with bearish trend confirmation"
  puts "Consider short positions or exit longs"
end

Understanding the Indicator

What It Measures

The Thrusting pattern measures the strength of a failed rally attempt during a downtrend. When a white candle appears but closes above the previous low yet below the midpoint of the black candle's body, it indicates: - Insufficient buying pressure to reverse the trend - Resistance at mid-body level of previous candle - Bears maintaining control despite brief rally - Likely continuation of the downtrend

The key characteristic is that the second candle "thrusts" into the first candle's body but doesn't penetrate deeply enough to suggest reversal.

Pattern Structure

Thrusting Pattern (Bearish Continuation): 1. First candle: Long black candle in an established downtrend 2. Second candle: White candle that: - Opens below the previous close - Rallies during the session - Closes above the first candle's low - Closes below the midpoint of the first candle's body - Fails to show sufficient strength for reversal

The critical element is the second candle closing in the lower half of the first candle's body, showing weakness in the rally attempt.

Indicator Characteristics

• Range: Returns -100 (bearish continuation) or 0 (no pattern)
• Type: Bearish continuation pattern (two-candle formation)
• Frequency: Moderately common in downtrends
• Best Used: During established downtrends with moderate selling pressure
• Reliability: Moderate; less reliable than In-Neck and On-Neck patterns

Interpretation

Signal Values

• -100: Bearish Thrusting pattern detected - downtrend expected to continue
• 0: No pattern present at this position

Pattern Recognition

Bearish Continuation Signal (-100): - Appears during an established downtrend - First candle shows strong selling with a long black body - Second candle attempts rally but closes well below the midpoint - The penetration level indicates insufficient bullish strength - Suggests sellers will reassert control and push prices lower

Market Psychology

The Thrusting pattern reveals important market dynamics: - Initial Decline: Long black candle confirms selling pressure - Gap Down: Second candle opens lower, showing bearish sentiment - Rally Attempt: White candle shows some buying interest - Weak Penetration: Close below midpoint shows buyers lack conviction - Resistance at Midpoint: Previous candle's mid-body acts as resistance - Continuation Expected: Insufficient strength suggests more downside

Trading Signals

Sell Signals

When the Thrusting pattern appears (-100):

1. Entry Point: Enter short after pattern confirmation or on breakdown
2. Confirmation: Verify pattern occurs in downtrend with volume confirmation
3. Stop Loss: Place stop above the high of the second candle
4. Target: Project to next support level or use 2:1 risk-reward

Example Scenario:

# Detect Thrusting pattern and generate trading signal
if pattern.last == -100
  entry_price = close.last
  pattern_high = [high[-2], high[-1]].max
  stop_loss = pattern_high * 1.02
  risk = stop_loss - entry_price
  target = entry_price - (2 * risk)

  puts "SELL Signal: Thrusting Pattern Detected"
  puts "Entry: $#{entry_price.round(2)}"
  puts "Stop Loss: $#{stop_loss.round(2)}"
  puts "Target: $#{target.round(2)}"
  puts "Risk/Reward: 1:2"
end

Exit Signals for Long Positions

For traders holding long positions:

1. Exit Point: Consider closing long positions when Thrusting pattern completes
2. Partial Exit: May reduce position size rather than full exit
3. Tighten Stops: Move stops closer to current price

Example Scenario:

# Exit or reduce long position on Thrusting pattern
if pattern.last == -100 && position == :long
  puts "WARNING: Thrusting pattern detected"
  puts "Recommendation: Reduce or exit long position"
  puts "Current Price: $#{close.last}"
  puts "Consider tightening stop loss"
end

Best Practices

Optimal Use Cases

This pattern works best in: - Established downtrends: Clear downward price movement required - Moderate volatility: Not in extreme market conditions - Liquid markets: Better price discovery and execution - Time frames: Most reliable on daily charts; also works on 4-hour charts - Volume context: Pattern stronger with declining volume on second candle

Combining with Other Indicators

With Trend Indicators: - Moving Averages: Price below key MAs (20, 50-day) confirms downtrend - ADX: ADX above 20 confirms trend strength - MACD: MACD below signal line confirms bearish momentum

With Volume Indicators: - Volume Analysis: Lower volume on second candle strengthens signal - On-Balance Volume (OBV): Declining OBV confirms selling pressure - Volume pattern: High volume on first candle, lower on second ideal

With Support/Resistance: - Resistance Levels: Pattern at resistance adds confirmation - Fibonacci Levels: Pattern at retracement level increases significance - Previous Lows: Distance to next support guides profit targets

Common Pitfalls

1. Confusing with Piercing Line: Thrusting closes below midpoint, Piercing above
2. Ignoring Trend Context: Pattern requires established downtrend
3. Trading Near Major Support: Avoid pattern at strong support levels
4. Overestimating Reliability: Pattern less reliable than In-Neck/On-Neck
5. Missing Volume Confirmation: Volume pattern critical for validation

Risk Management Guidelines

Stop Loss Placement: - Initial Stop: Above the high of the second candle - Alternative Stop: Above recent swing high - Buffer: Add 1-2% for volatility - Time Stop: Exit if no follow-through within 3-5 bars

Position Sizing: - Use conservative position sizes due to moderate reliability - Risk no more than 1-2% of account per trade - Consider waiting for additional confirmation before entering - Scale into position gradually

Practical Example

Complete trading scenario:

require 'sqa/tai'

# Historical data showing downtrend
open =  [52.00, 51.00, 50.00, 48.50, 47.00, 46.50, 45.50]
high =  [52.50, 51.20, 50.20, 48.80, 47.40, 47.50, 46.00]
low =   [50.90, 49.80, 48.30, 46.90, 46.40, 46.30, 45.20]
close = [51.00, 50.00, 48.50, 47.00, 46.50, 47.00, 45.40]

# Calculate indicators
pattern = SQA::TAI.cdl_thrusting(open, high, low, close)
sma_20 = SQA::TAI.sma(close, 5)  # Using 5 for short data
rsi = SQA::TAI.rsi(close, 5)

# Analysis
current_signal = pattern.last
current_price = close.last
in_downtrend = current_price < sma_20.last

if current_signal == -100 && in_downtrend
  puts "=" * 50
  puts "THRUSTING BEARISH CONTINUATION PATTERN"
  puts "=" * 50
  puts "Current Price: $#{current_price}"
  puts "Pattern Signal: #{current_signal}"
  puts "Below 20 SMA: #{in_downtrend}"
  puts "RSI: #{rsi.last.round(2)}"
  puts ""

  # Calculate trade parameters
  entry = current_price
  pattern_high = [high[-2], high[-1]].max
  stop = pattern_high * 1.02
  risk = stop - entry
  target = entry - (2 * risk)

  puts "SHORT TRADE SETUP:"
  puts "Entry: $#{entry.round(2)}"
  puts "Stop Loss: $#{stop.round(2)}"
  puts "Target: $#{target.round(2)}"
  puts "Risk per share: $#{risk.round(2)}"
  puts ""
  puts "PATTERN DETAILS:"
  puts "- First candle: Long black (selling pressure)"
  puts "- Second candle: White thrust (weak rally)"
  puts "- Close below midpoint: Insufficient buying"
  puts "- Downtrend expected to continue"
end

Related Indicators

Similar Patterns

• In-Neck Pattern: More bearish, closes at previous low
• On-Neck Pattern: Most bearish, closes below previous low
• Piercing Line: Bullish counterpart, closes above midpoint
• Dark Cloud Cover: Bearish reversal pattern

Complementary Patterns

• Bearish Engulfing: Stronger bearish signal
• Evening Star: Bearish reversal pattern
• Three Black Crows: Strong bearish continuation

Indicator Combinations

• RSI: Confirms bearish momentum below 50
• Moving Averages: Confirms downtrend structure
• MACD: Validates bearish momentum

Advanced Topics

Multi-Timeframe Analysis

For stronger confirmation: 1. Identify Thrusting pattern on trading timeframe (daily) 2. Confirm downtrend on higher timeframe (weekly) 3. Use lower timeframe (4-hour) for precise entry timing 4. Monitor for follow-through on all timeframes

Pattern Variations

• Strong Thrusting: Second candle closes near (but below) midpoint
• Weak Thrusting: Second candle barely penetrates first candle's body
• Volume Pattern: High volume first candle, declining volume second

Statistical Considerations

Research suggests: - Success rate: Approximately 54-60% for continuation - Average decline: 3-6% after pattern completion - Time to target: Usually 10-20 trading days - Less reliable than In-Neck or On-Neck patterns - Works better when combined with other bearish indicators

References

• "Japanese Candlestick Charting Techniques" by Steve Nison
• "Encyclopedia of Candlestick Charts" by Thomas Bulkowski
• "The Candlestick Course" by Steve Nison
• "Technical Analysis of the Financial Markets" by John J. Murphy

See Also

• Pattern Recognition Overview
• Bearish Continuation Patterns
• In-Neck Pattern
• On-Neck Pattern
• Back to Indicators