Candle 3 and Candle 4: continuation, closure, and expected wick
Understand canonical Candle 3 continuation, the distinct C3 reversal closure, when Candle 4 becomes actionable, and how equilibrium frames expected-wick context.
Candle 3 and Candle 4 most often describe continuation after a valid Candle 2 reversal. FMP also recognizes a distinct C3 reversal-closure subtype, so the C3 label must be read with its designation rather than assumed to mean continuation in every case.
The sequence has ownership and prerequisites:
Canonical delivery path: Valid Candle 2 reversal → Candle 3 continuation → Candle 4 terminal continuation
Candle 3 belongs to the original reversal. Candle 4 becomes actionable only after Candle 3 actually delivers. Equilibrium then helps frame where Candle 4’s expected wick can form without invalidating the directional-half premise.
The model organizes historical and developing price structure. It cannot guarantee delivery, an entry, or a profitable outcome.
Continuation and terminal delivery
Delivered C3 arms C4 context—and the model stops there.
A bullish sequence uses C3 delivery quality and equilibrium to frame the directional half studied during C4.
Delivered C3 requires a directional body, a new extreme, and an equilibrium hold. Its upper half frames bullish C4 expected-wick context; a fresh paired CISD is still separate, and C4 is terminal.
- Delivered C3
- Directional half
- C3 equilibrium
- Terminal C4
Start with a valid Candle 2
A Candle 2 reversal closure forms when price sweeps the previous model candle’s high or low and body-closes back through that swept boundary. In a bullish case, price sweeps the prior low and closes back above it. In a bearish case, price sweeps the prior high and closes back below it.
The closure is color-agnostic. More importantly, it matters only at a qualified higher-timeframe point of interest. The Fractal Model applies a strict location precedence:
- confirmed swing;
- active directional fair value gap; or
- the immediately swept opposing reference candle when neither higher-order location exists.
With strict paired confirmation, a lower-timeframe CISD must also occur. Read CISD trading explained before using the continuation labels.
What is Candle 3?
Candle 3 is the continuation phase after a valid Candle 2 reversal. It tests whether the shift identified by Candle 2 can produce directional delivery.
The wick profile of Candle 2 helps frame expectations:
- A large reversal wick suggests Candle 2 spent much of its range rejecting the sweep. That profile favors waiting for Candle 3 continuation rather than forcing a late Candle 2 read.
- A small or expansion-style wick suggests Candle 2 already delivered directionally. Candle 3 may still continue, but it carries greater chase and retracement risk.
There is no universal numeric wick cutoff in the source methodology. Fractal Model Pro can display a configurable wick-to-body ratio for information, but that ratio should not silently filter a structurally valid setup.
When Candle 3 is the reversal closure
A separate path exists when the original model C2 sweeps a qualified high or low but does not reclaim that boundary. If the next model candle body-closes back through the original swept level, FMP can designate that event as a C3 reversal closure. It retains the original sweep's POI and geometry rather than treating the later candle as a new location search.
Do not confuse that subtype with delayed C2 confirmation. When C2 already reclaimed the boundary and paired CISD arrives in the permitted next window, the setup remains designated C2 even though its confirmation used next-window geometry.
What does a “delivered” Candle 3 mean?
Continuation requires more than numbering the next candle. Fractal Model Pro uses an explicit delivery-quality proxy:
- the body closes in the setup direction;
- price creates a new directional extreme; and
- the wick holds beyond the prior candle’s equilibrium in the continuation direction.
For bullish delivery, that means a directional body and new high while the wick holds in the directional half of the preceding range. The bearish case is the inverse.
These conditions help distinguish a continuation candle from a weak, overlapping candle. They remain a model classification, not a prediction about the following session.
What is Candle 4?
Candle 4 is the terminal continuation phase of the model. It can extend delivery after a confirmed swing and a delivered Candle 3, but it should not be projected automatically from every Candle 3 label.
Only a delivered Candle 3 arms actionable Candle 4 context. A weak Candle 3 may remain visible as an audit label, but it does not create a directional Candle 4 zone, regain continuation score weight, or justify mirroring new zones after Candle 4.
The model ends here. Extending the same projection logic into Candle 5 or Candle 6 changes the framework and encourages perpetual relabeling.
Equilibrium and the expected-wick half
Equilibrium is the 50% level of Candle 3’s range. It divides that range into an upper and lower half.
After a delivered bullish Candle 3:
- Candle 4 continuation is framed from the upper half of Candle 3.
- Candle 4’s wick is expected to form within that directional half.
- A bullish Candle 4 open below Candle 3 equilibrium invalidates the directional-half zone premise.
After a delivered bearish Candle 3:
- Candle 4 continuation is framed from the lower half of Candle 3.
- Candle 4’s wick is expected to form within that directional half.
- A bearish Candle 4 open above Candle 3 equilibrium invalidates the directional-half zone premise.
“Expected wick” does not mean price must touch a precise line or reverse on contact. It describes the half of Candle 3 that is structurally consistent with a shallow continuation retracement. Deep movement through equilibrium signals that the original directional-half assumption no longer fits.
The expected-wick area is context, not an entry
An equilibrium half can contain a fair value gap, a protected swing, or another lower-timeframe point of interest. That confluence helps organize where a retracement could be studied.
It still does not create paired lower-timeframe CISD.
This separation prevents a common chart-reading error:
- Location: price enters the expected-wick half or a point of interest inside it.
- Confirmation: the paired lower timeframe records a fresh body close through its CISD reference.
- Risk decision: the trader independently decides whether the observation fits personal rules and risk limits.
A midpoint penetration may stop an old ray from extending for visual clarity. It must not be recorded as the new CISD event required after a Candle 3 or Candle 4 retracement.
A Candle 3–Candle 4 workflow
1. Validate the original reversal
Confirm the Candle 2 sweep, close back through the swept level, qualified point of interest, and paired CISD. Continuation cannot repair an invalid origin.
2. Read Candle 2’s wick profile
Use large-versus-small wick character as expectation context. Do not convert an informational ratio into an unsupported pass/fail threshold.
3. Evaluate Candle 3 delivery
First distinguish canonical C3 continuation from the C3 reversal-closure subtype. Then check directional body, new extreme, and equilibrium hold. If Candle 3 is weak or overlapping, do not arm actionable Candle 4 context.
4. Mark Candle 3 equilibrium
For bullish delivery, focus on the upper half. For bearish delivery, focus on the lower half.
5. Check the Candle 4 open
A bullish open below equilibrium or bearish open above equilibrium invalidates the expected directional-half zone premise.
6. Return to the paired lower timeframe
If price retraces into a qualified area, wait for a fresh paired-timeframe CISD rather than treating the touch as confirmation.
7. Stop the model at Candle 4
Record the terminal continuation and wait for a new valid structural sequence. Do not create C5/C6 zones from the old setup.
For a complete context chain, see multi-timeframe analysis with 15m, 4H, 1D, and 1W.
Bullish and bearish Candle 4 comparison
| Question | Bullish Candle 4 | Bearish Candle 4 |
|---|---|---|
| Required predecessor | Delivered bullish Candle 3 | Delivered bearish Candle 3 |
| Directional half | Upper half of Candle 3 | Lower half of Candle 3 |
| Expected wick context | Above Candle 3 equilibrium | Below Candle 3 equilibrium |
| Invalidating open for the half-zone premise | Below equilibrium | Above equilibrium |
| Lower-timeframe confirmation | Fresh bullish paired CISD | Fresh bearish paired CISD |
The table summarizes model context. It is not a trade signal or a claim that Candle 4 will reach a projected target.
Common Candle 3 and Candle 4 mistakes
Numbering continuation after an invalid Candle 2
If the original reversal lacks a qualified point of interest or required confirmation, later candles do not inherit a valid model merely because price moved in the anticipated direction.
Chasing Candle 3 after Candle 2 already expanded
A small-wick expansion Candle 2 may have used much of the directional move. Candle 3 can still extend, but its profile differs from continuation after a large-wick rejection.
Arming Candle 4 after a weak Candle 3
Candle 4 context requires delivered Candle 3 quality. Chronological numbering alone is insufficient.
Treating equilibrium as a guaranteed reversal level
Equilibrium divides a range. It frames continuation depth; it does not force price to react.
Calling a zone touch CISD
Location and confirmation are separate. A fresh paired lower-timeframe body close is still required.
Repainting the owner on every continuation candle
The original reversal owns its projections through Candle 3 and Candle 4. Same-direction continuation should advance that sequence, not rebase it as a rolling Candle 2.
Extending the model beyond Candle 4
Candle 4 is terminal. Adding C5 and C6 projections gives an old setup indefinite life and obscures the next independent structure.
Candle 3 and Candle 4 checklist
- Did Candle 2 sweep and close back through the prior level?
- Was the original sweep at a qualified model-timeframe point of interest?
- Did the correct paired timeframe confirm CISD?
- Does Candle 2 show a reversal-wick or expansion-wick profile?
- Did I distinguish canonical C3 continuation from the C3 reversal-closure subtype?
- Did Candle 3 close directionally and make a new extreme?
- Did Candle 3 hold the required side of equilibrium?
- Is Candle 4 armed only because Candle 3 delivered?
- Is the expected-wick half still valid at the Candle 4 open?
- Am I waiting for fresh lower-timeframe CISD after a retracement?
- Have I stopped the sequence at Candle 4?
Candle 3 and Candle 4 FAQ
Is Candle 3 always easier to trade than Candle 2?
No. Candle 3 is a continuation phase, but its quality depends on the original reversal, Candle 2’s wick profile, current location, and lower-timeframe confirmation. After a strong Candle 2 expansion, Candle 3 can become chase-prone.
Is there a fixed wick percentage that separates reversal from expansion?
No universal cutoff is defined in the underlying methodology. A configurable ratio can make the observation consistent, but should remain informational.
Can Candle 4 exist after any Candle 3?
Chronologically, a fourth candle always follows a third. Actionable Fractal Model Candle 4 context, however, requires a delivered Candle 3.
Why use Candle 3 equilibrium for Candle 4?
Equilibrium tests whether the retracement remains in the directional half associated with continuation. Crossing too deeply—or opening on the wrong side—invalidates that half-zone premise.
Does touching the expected-wick zone confirm an entry?
No. The zone supplies context. A fresh paired lower-timeframe CISD supplies delivery confirmation, and neither determines personal risk.
What comes after Candle 4?
The modeled sequence is complete. The chart should wait for a new valid structural event rather than extending the old setup into C5 or C6.
Follow the sequence without losing the origin
Fractal Model Pro keeps the valid Candle 2 origin, Candle 3 delivery, terminal Candle 4 context, equilibrium, projections, and paired CISD on one chart. Its purpose is to preserve the structure traders often lose when manually relabeling every new candle.