The Three Method patterns look similar to the flag or pennant chart formations. Falling Three Method - Bearish continuation pattern
- Appears in a downtrend
- Marks a pause before resuming the downtrend
- Pattern composed of 4 or more candle lines
- 1st candle is a long bearish candle
- Follows 2 to 5 or small candles of either color (ideally green) rising within the 1st candle's high/low range
- The shadows of the small candles can extend the 1st candle's range but not their real body
- Last candle is a long bearish candle
- Last candle should gap down at open and close below the 1st candle's close
Rising Three Method - Bullish continuation pattern
- Appears in an uptrend
- Marks a pause before resuming the uptrend
- Pattern composed of 4 or more candle lines
- 1st candle is a long bullish candle
- Follows 2 to 5 small candles of either color (ideally red) falling within the 1st candle's high/low range
- The shadows of the small candles can extend the 1st candle's range but not their real body
- The small candles range should be within the high/low range of the 1st candle
- Last candle is a long bullish candle
- Last candle should ideally gap up at open and close above the 1st candle's close
Below is a chart example of the Falling Three Method pattern
