What it looks like
Five candles in a rise. First, a long up candle. Then three small candles (often down candles) that drift lower but stay inside the first candle's high and low. Last, a long up candle that closes above the first candle's close, at a new high.
What it means
The rise paused and buyers came straight back. The three small candles show sellers could not even get price back below the first candle's low. It says the trend is still in charge and the pause was only a rest.
How to trade it
- 1
Check the trend first: the market should already be rising (higher highs and higher lows). Skip it in a sideways market.
- 2
Buy when price closes above the pattern's high.
- 3
Put the stop just below the pattern's low, which is usually the low of the first long candle.
- 4
Target one to two times the stop distance, or the next ceiling.
- 5
Example: on the gold 1 hour chart the five candles span 22 points. A close above the high triggers a buy with a stop about 24 points away and a target of 24 to 48 points.
A close below the pattern's low.
Where it works best
Early or mid way through a clear uptrend, on 15 minute charts and higher, with no ceiling just overhead.
WickSpeak finds the rising three methods automatically on any chart and names it on the candles that made it. It writes what it is, how to trade it and what proves it wrong right on the chart. Playbook can use it, or any of the 146 patterns, as a condition alongside up to 12 conditions on any of 12 timeframes, and backtest the play on past candles with your costs.
Common mistakes
- Trading it in a sideways market, where it means nothing.
- Accepting middle candles that break below the first candle's low.
- Buying during the three small candles before the trend has resumed.
Related patterns
Questions traders ask
Is rising three methods bullish?
Yes. It is a bullish continuation pattern: it says an uptrend paused and is carrying on. It is only valid inside an existing rise.
Do the middle candles have to be down candles?
They are usually small down candles, but what matters most is that they stay inside the first long candle's range. If they break its low, the pattern is not valid.
How is it different from a bull flag?
It is the same idea on a smaller scale. A rising three methods is five candles, while a bull flag is a chart pattern that can last many candles.
What proves rising three methods wrong?
A close below the pattern's low. That means the pause has turned into a real fall.