For a better understanding of this article, you should already know what Japanese Candlesticks are and all their features; for this reason, we suggest you to read this introductory article to Japanese Candlesticks: Japanese Candlestick Chart ( So that you can understand also the Ratings given to the Candlestick Patterns for the “quality” of the signal and for their frequency to “appear” on Charts).
Let’s analyse now the following Candlestick Pattern: “Rising Three Methods”.
Three Methods Pattern
– Normally it should be a signal of continuation of the current Trend.
Rising Three Methods
– It occurs during an Uptrend; confirmation is required by the candles that follow the Pattern.
– The First and Fifth Candle are white and are longer than the other Three Candles of the Pattern.
– The Second, Third and Fourth Candle are black (Or they alternate the color: it only matters that they represent a Decline in Prices; normally is the Third Candle that can be of any color). Moreover these Candles are fully contained within the Real Body of the First Candle (or within the High-Low Range of the First Candle); while the Lows are above the Open of the First Candle and the Highs are below the Close of the First Candle.
– The Close of the Fifth Candle is above the Close of the First Candle.