Counter attack candlestick pattern: matching closes and confirmation
A counter attack formation pairs two opposite-direction real bodies with equal or nearly equal closes. After a rise, the bearish version has an up candle followed by a down candle; after a decline, the bullish version reverses those colors. The second candle retraces its opening move back toward the previous close. This describes two bars, not proof that the preceding trend has ended.
Key Takeaways
- Specify how long each body must be and how close the two closing prices must be. Exact equality and a tolerance are different detectors.
- Keep prior trend, pattern detection and later confirmation as separate conditions.
- A full gap beyond the previous high or low is stricter than an open beyond its close.
- No fixed success rate or best timeframe follows from matching closes.
Make matching closes measurable
TA-Lib implements this pattern with opposite candle directions, two long bodies and a configurable close-equality tolerance. Its body and equality settings use historical ranges; it does not test a prior trend or an additional full-range gap in this function. A custom detector should state those choices explicitly instead of assuming every platform uses the same definition.
- For a simple illustrative variant, require each body to exceed the mean real-body length of the 20 completed bars before the pair. Freeze that reference for both candles. This is a test specification, not the TA-Lib default.
- Choose a closing tolerance before testing, such as one minimum price tick. Require absolute difference between the two closes to be no greater than that tolerance.
- Classify the prior trend using bars before the pair. A five-bar or ten-bar lookback is a parameter choice, not a universal minimum.
- For a separate strict-gap variant, require the bearish second open above the first high, or the bullish second open below the first low. Record it as an extra filter.
Hypothetical bearish and bullish examples
These prices are invented for calculation, not historical trades. Assume the frozen average body is 2 price units and the minimum tick is 0.01. In the bearish pair, the bodies are 4 and 3 and both closes are 104. In the bullish pair, the bodies are 4 and 3 and both closes are 100. Both satisfy the illustrative body and equality tests, provided the separately defined prior trend qualifies.
| Pair / bar | Open | High | Low | Close |
|---|---|---|---|---|
| Bearish 1 | 100 | 105 | 99 | 104 |
| Bearish 2 | 107 | 108 | 103 | 104 |
| Bullish 1 | 104 | 105 | 99 | 100 |
| Bullish 2 | 97 | 101 | 96 | 100 |
- A bearish second close of 104.01 is within the illustrative one-tick tolerance; 104.02 is outside it. Neither difference by itself establishes a stronger or weaker forecast.
- The bearish second open of 107 also passes the strict-gap variant because it exceeds the first high of 105. An open of 104.5 would be above the first close but would not pass that full-range gap test.
- The opening price need not be the candle high or low. Use the recorded extremes when defining a pattern range.
Place confirmation on the bar that supplies it
One illustrative bearish confirmation waits for the next completed candle to close below the full pair low of 99. Its bullish counterpart waits for a close above the pair high of 105. Expire the setup if the next candle does not confirm; a different waiting window is a different test. A later confirmation cannot be plotted back as if it were known at the second pattern candle.
- For the bearish example, define an invalidating trade above 108; for the bullish example, below 96. Decide in advance how to handle a candle that crosses both confirmation and invalidation boundaries. OHLC alone may not reveal their order.
- An entry trigger is not its eventual fill price. Specify order timing, stop, target, position size, fees and slippage; gaps can exceed the planned stop distance.
- Adding RSI or volume changes the sample. Compare those filters with the unfiltered rule rather than treating overbought, oversold or high volume as proof of reversal or institutional participation.
Distinguish matching closes from body penetration
A bearish counter attack returns toward the first close. Dark cloud cover instead closes below the midpoint of the first bullish body while staying above its open. The bullish comparison is a piercing pattern: the second close reaches above the first bearish body midpoint while remaining below its open. Greater body penetration is a geometric distinction, not a measured profitability ranking.
- On continuous-session charts, opens are often close to preceding closes. A strict gap requirement can select very few bars; inspect the chosen feed and session.
- Use ordinary OHLC candles and evaluate completed bars. Synthetic candles or unfinished bars can change which pairs qualify.
- Test every qualifying pair in a fixed window, including failed and expired candidates. Report the definition of success, sample count and costs before interpreting any percentage.
This page is for informational purposes only and does not constitute investment advice. Trading stocks, forex, and crypto carries substantial risk of loss. Past performance does not guarantee future results. Always consult a qualified financial advisor before making trading decisions.