Falling three methods patterns are bearish patterns. They are essentially a bear flag pattern. The flag pole consists of either a big bearish candle or several bearish candles put together. Next, there are three smaller bullish candles that create the pullback. Look for a breakdown when price falls below the third pullback candle and holds.
What Are Falling Three Methods Patterns?
Falling three methods patterns are five candlestick patterns found on stock charts. It is a bearish continuation pattern. The stock is already in a strong downtrend when this pattern forms. At the completion of the pattern price should continue downwards.
Falling three methods patterns are made up of five candlesticks. This pattern is a little bit of a bigger pattern in the small candlesticks patterns.
The first candlestick in the falling three is a long bearish candlestick. This candle is a part of the trend.
Next there are three consecutive candles; should be smaller bullish candlesticks. These candlesticks should trade below the high of the first bearish candlestick.
Then the last candlestick is another big bearish one. This is the continuation of the bearish trend. Hence price should continue to move down with falling three methods patterns.
Those three bearish candles are consolidation candles. It is important to see where price is in regards to moving average lines. This usually predicts when the consolidation and the three moves up occur before price continues downward.
