Serial Candlestick: Falling Three Methods
The Three Methods candlestick pattern is a continuation pattern (continuous) trend that can appear in uptrend and or downtrend. The rise of three patterns pattern in the ascending trend is called the Rising Three Methodes pattern (up three methods) and if the emergence of the three patterns pattern in the downtrend is called the Falling Three Methods pattern (down three methods). The pattern of these three methods consists of at least five candles but can include more. This is similar to a flags or pennant formation and also represents a sideways or consolidation period.
A continuous pattern is formed when the price enters the consolidation or correction phase during the trend and indicates that a continuation of the previous trend is highly likely. The present trend is a prerequisite for continuous patterns because there must be some tendency that will indicate the sustainability of the trend after the pattern is completed. If there is no previous trend, then the pattern is not a valid continuous pattern.
The Falling Three Methods pattern includes a continuous candlestick pattern (continuous) trend that appears in the descending trend. The first candlestick in this pattern is a bearish candlestick (dark color) with a great real body candle. Some of the following candlesticks should be smaller candlesticks bullish (light-colored). This candle should not exceed the first candlestick range. In other words it should be between the highest (high) and low (low) levels of the first candlestick. The last candlestick that complements the falling three methods pattern should have an open level lower than the previous close candlestick level and should be closed below the first close candlestick level. This pattern is more reliable if the first candlestick does not have a lot of shadow up and down.