The Rising Three Methods is a continuation pattern composed of five candlesticks that occurs in an uptrend. Specifically, it includes one large bullish candlestick followed by three smaller candlesticks (both bullish and bearish), and finally another large bullish candlestick. This pattern typically appears during a sustained price increase, indicating that bullish forces regain momentum after a brief consolidation, signaling that the price will continue to rise.
The specific meaning of the Rising Three Methods is as follows:
The first candlestick is a large bullish candlestick, showing strong upward momentum.
The second, third, and fourth candlesticks are smaller candlesticks; these candlesticks usually fall within the price range of the first large bullish candlestick, and the trading volume shrinks, indicating a brief consolidation or pullback after the previous rise.
The fifth candlestick is again a large bullish candlestick, and its closing price exceeds the closing price of the first large bullish candlestick, indicating that bullish forces have regained control and the market will continue to rise.
Key points of this pattern include:
The Rising Three Methods must appear in a clear uptrend, with moving averages in a bullish arrangement.
The range of fluctuation for the three smaller candlesticks should be between the high and low points of the first large bullish candlestick.
The body of the last large bullish candlestick should encompass the highs of the three smaller candlesticks, forming a bullish engulfing structure.
Trading volume should exhibit a shrinking state during the consolidation period, but should significantly increase when the last large bullish candlestick rises.
When identifying the Rising Three Methods, one should pay attention to the integrity of the pattern and the market context, combining other technical indicators and fundamental analysis to improve the accuracy of trading decisions.