The Rising and Falling Three Methods Candlestick Patterns
The Rising and Falling Three Methods Patterns
The Three Methods candlestick pattern is a trend continuation pattern that can appear in an uptrend or a down trend. In an uptrend it is called the Rising Three Methods pattern and in a downtrend it is called the Falling Three Methods pattern. The Three Methods pattern consists of at least five candlesticks but may include more. It is similar to the flag or pennant formations and also represent a period of congestion or consolidation.
The Rising Three Methods
The Rising Three Methods pattern is a continuation pattern that appears in an uptrend. The first candlestick in this pattern is a white bullish candlestick with a large real body. The following few candlesticks should be smaller bearish candlesticks that are dark in color. These candlesticks should not exceed the range of the first candlestick. In other words it should be within the high and low of the first candlestick. The last candlestick that completes the pattern should open higher than the close of its preceding candlestick and should close above the close of the first candlestick. This pattern is more reliable if the first candlestick does not have much upper and lower shadows.
The Falling Three Methods
The Falling Three Methods is the opposite of the Rising Three Methods and appears in a downtrend. The first candlestick in this pattern is a dark bearish candlestick with a large real body. The following few candlesticks should be smaller rising candlesticks that are bullish and white or light in color. These candlesticks should not exceed the high or the low of the first candlestick. The last candlestick that completes the pattern should below the close of its preceding candlestick and should close lower that the close of the first candlestick.