Falling Three Methods

Falling Three Methods starts with the first day being a long candlestick body.  This is followed by three small body days, each fully contained within the range of the high and low of the first day. The fifth day closes at a new low.

Falling Three Methods

The Falling Three Methods candlestick formation is a 5 day bearish Continuation Pattern.

 


Falling Three Methods Identification

Falling Three Methods occurs after a downtrend, with the first day of the pattern being a long candlestick body.  This is followed by three small body days, each fully contained within the range of the high and low of the first day. The fifth day closes at a new low.

Falling Three Methods candlestick pattern


Falling Three Methods Interpretation

The bearish Falling Three Methods pattern is a continuation pattern with a bearish trend that is temporarily broken without causing a reversal. The temporary break shows that there is some doubt about the ability of the trend to continue. This doubt increases as the small-range reaction days take place.  However, given the fact that a new high cannot be made, the bearishness is resumed and new lows are set quickly.

The reliability of this pattern is very high. However, a confirmation in the form of a black candlestick with a lower closing is still suggested.

Related Terms