Rising Three Methods Candlestick Pattern

Rising Three Methods Candlestick Pattern

(this article was from Nilesh but I abandoned it because of the poor quality)

Before we begin with our main topic on the rising three methods candlestick pattern, you need to know this concept briefly. Spotting candlestick patterns is very essential part of the technical analysis. They make usual appearances on graphical representations of stock prices with line charts, figure charts, bar charts, and point charts.

A brief overview of candlestick chart analysis

The history of the candlestick chart dates back to the 18th century when this concept was developed by a trader from Japan. The main intuition of making this chart was to track down the prices of rice contracts. There is also a belief to have come forth through the books of Steve Nison to the Western world. The name of his two books was Strategies for Profiting with Japanese Candlestick Charts and another was Beyond Candlesticks: New Japanese Charting Techniques Revealed in 1991.

How To Identify Rising Three Methods Candlestick Pattern

How do we spot a rising three-candlestick pattern?

Well, this comes with 5 candlesticks denoted with different colors. Let us briefly know each of them.

The first and fifth ones appear to be light and are long bullish candlesticks. The color denoting them is green. Contrary to them, the 2nd, 3rd, and 4th candlesticks are shown as dark, representing short bearish candlesticks. They are denoted in red.

Rising Three Methods Candlestick Pattern
Rising Three Method backtest

Even though the five candlesticks are supposed to indicate five successive days of trading. However, the rising three-candlestick pattern is shown in any trading duration and is applicable in both positional trading as well as intra-day trading.

Rising Three Methods Wicks And Shadows

Ever wonder what black lines indicate in the above and below of the candlesticks? If not, then these can be easily understood just the way you lighten the usual candlesticks in homes. These are known as wicks or shadows representing highs and lows during the trading period. But in our matter, they signify the intra-day highs and intra-day lows reached by the security.

Rising Three Methods Closing & Opening prices

When you see the descending limit of the green candlesticks, it means the opening price, and the ascending limit represents the closing price. In the same way, the ascending threshold of the red candlestick shows the beginning of the stock in the trading session, and on the flip side, the descending limit signifies the end of it.

Rising Three Methods Backtest

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Key Features of Rising Three Methods Candlestick Pattern

Below are the key points that you need to keep in mind about rising three methods.

  • For the motive of experiencing possible gains, the trade can be held by an investor or purchase more stock after he is assured of the rising three methods candlestick pattern.
  • The first candle can also seem bullish candlestick in the rising three-candlestick pattern. This means there are no wicks/shadows upside and downside. This indicates that the opening price is minimum, and the closing price is high during the trading session.
  • The 5th candlestick must not cause breakage to the low of the first candlestick. In the ring three methods, the fifth must be higher above the first candlestick. And this signifies the bulls dominating the market when there is a question of security.
  • The fifth one must exceed in volume in comparison to the first one in the rising three candlestick pattern. Whereas, it is not so essential to consider the volumes of the second, third, and fourth candlesticks.

Falling Three Methods Candlestick Pattern

After knowing much about the Rising Three Methods candlestick pattern, it is important to know about the opposite Falling Three Methods candlestick pattern, so that the difference between them is clear.

Talking about the latter then this comes as a bearish five-candle consistency pattern indicating interference, if not turnaround, of a present downward trend. This pattern is featured 2 long candlesticks in the direction of the trend. In this case, it is down from the beginning and to the end, along with 3 small counter-trend candlesticks in the middle.

Occurrence

Falling three methods candlestick patterns happen when there is a downward trend stands since conviction is absent, by the bears shoving to a minimum price of the security. This paves to a counter move that often comes as a result of profit-taking and most possibly the curious bulls expecting a turnaround. The following failure at making new highs or closures above the opening price of the long down candle encourages bears to participate again, resulting in the re-opening of the downward trend.


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