What is the Rising Three Methods Pattern?
Rising three methods is a bullish continuation pattern that appears in an ongoing uptrend. The Rising three methods pattern consists of five candles. When the first and last candles are long and bullish, with three small bearish candles in between.
The Rising Three methods pattern form when a Security’s price action meets the following characteristics:
- The first bar of the pattern is a bullish candlestick with a large real body within a well-defined uptrend.
- Subsequent candlesticks, normally three consecutive bearish small-bodied candlesticks that trade above the low and below the high of the first candlestick.
- The last bar is another bullish candlestick with a large real body that breaches the high and closes above the high and close established with the first candlestick, which suggests the bulls are back in control of the security’s direction.
How to spot a rising three methods candlestick pattern?
The rising three candlestick pattern has five candlesticks. The first and the fifth ones are light — usually denoted by the green color. They are long bullish candlesticks. The second, third, and fifth candlesticks are dark — generally denoted in red. They are short bearish candlesticks.
They are short bearish candlesticks. In the illustration below the five candlesticks have been assumed to signify five successive days of trading.
Anatomy of rising three methods candlestick pattern
1) Shadows/wicks:
You might wonder what the black lines above and below the candlesticks stand for. Like in a regular candlestick we light in our homes, these are called wicks or shadows. They signify the highs and lows during the trading period being considered
2) Opening and closing prices:
The downwards limit of the green candlestick denotes the opening price and the upward limit signifies the closing price. Following the same logic, the upward threshold of the red ones tells us where the stock started in the trading session and the downwards limit tells us where it ended.
EXAMPLE 1:
Have you ever considered the similarities between certain candlestick charts and rollercoasters? Like a rollercoaster that gradually builds the level of excitement, this chart begins with some small hills. The second descent forms a Rising Three Methods pattern. Three short, red candles are sandwiched between two long, green candles. The patterns follow a modest uptrend, the bears seizing control from the bulls. However, during each of the three sessions steered by the bears, they only manage to push the price down slightly. After the third candle, the bulls fight back and prove their dominance by creating a colossal green candle that closes slightly above the previous green candle’s close.
EXAMPLE 2:
The candles leading up to this Rising Three Methods pattern convey the uncertainty of the investors. Although the bulls hold the reins for a period, forming an uptrend, their upward momentum is followed by a Doji and a long, black candle. After the bulls manage to gain control again, the Rising Three Methods pattern materializes. The bulls just can’t catch a break, it seems! However, after the bears make three feeble efforts to push down the price, the bulls seize control once more. After an impressive surge, they continue the uptrend for the next several price periods. Unfortunately, as you can see, their time in the sun won’t last. Sorry, bulls!
EXAMPLE 3:
Let’s end with the most mammoth chart. After many sessions, many candles, and many ups and downs, the bulls start to make some progress in their upward march. After two big jumps (and more than a handful of tiny candles), three little red candles and a Doji appear. Despite the Doji, this arrangement of candlesticks can qualify as a Rising Three Methods pattern. The bears’ feeble effort to push down the price fails unsurprisingly. Two giant green candles follow it, continuing the prior uptrend with great force and confidence. Despite a few sessions of struggle and uncertainty, the bulls have pulled through. The price continues to climb.
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