Definition
Bullish Rising Three Methods is a trend continuation pattern which warns traders to the weakening of the current trend. The first day’s long white candle is followed by three shorter, decreasing candles. The smaller candles reflect the resistance of the trend, which may involve a trend reversal. These 3 candles are usually black and a part of their bodies stay within the first day’s price movement’s range. The formation ends with another white candle on the 5th day. This candle’s opening price is higher than the first day’s closing price. The ascending trend must continue.
- Trend: Continuation
- Expected trend: Bullish
- Previous trend: Bullish
- Reliability: Low
- Type: Bullish
- Number: 5
Recognition
- The market is in an upward trend.
- The first day is a long white candle.
- Second, third, and fourth days are short candles in an inclining pattern, but the trading range does not fall below the first day’s.
- The fifth day is also a long white candle which exceeds the closing price of the first day’s candle.
Interpretation
The long white candle in the ascending trend is followed by three smaller, black candles in an inclining pattern. On the 5th day, another white candle is formed, giving a new maximum price to the trend. The 3-day inclining trend is characterised by low volume, buyers pause the purchasing activity. The volume will be high again for the white candle on day 5. The ascending trend must continue after the short break.
Important factors
The high-low trading ranges include the shadows as well. The formation has a low reliability, verification from another source is needed. The confirmation could come from a white candle with an upward gap or a higher closing price.
