Falling Three Method and Rising Three Method

Saturday, March 16, 2013
The Three Method patterns look similar to the flag or pennant chart formations.


Falling Three Method
  • Bearish continuation pattern
  • Appears in a downtrend
  • Marks a pause before resuming the downtrend 
  • Pattern composed of 4 or more candle lines
  • 1st candle is a long bearish candle
  • Follows 2 to 5 or small candles of either color (ideally green) rising within the 1st candle's high/low range
  • The shadows of the small candles can extend the 1st candle's range but not their real body
  • Last candle is a long bearish candle
  • Last candle should gap down at open and close below the 1st candle's close 

Rising Three Method
  • Bullish continuation pattern
  • Appears in an uptrend
  • Marks a pause before resuming the uptrend
  • Pattern composed of 4 or more candle lines
  • 1st candle is a long bullish candle
  • Follows 2 to 5 small candles of either color (ideally red) falling within the 1st candle's high/low range
  • The shadows of the small candles can extend the 1st candle's range but not their real body
  • The small candles range should be within the high/low range of the 1st candle
  • Last candle is a long bullish candle
  • Last candle should ideally gap up at open and close above the 1st candle's close



            Below is a chart example of the Falling Three Method pattern