How to identify

1.   A downtrend is under way 2.   The first day is a long black day 3.   The second, third, and fourth days have small real bodies and follow a brief uptrend pattern, but stay within the range of the first day 4.   The fifth day is a long black day that opens near the previous days close and then closes below the close of the first day at a new low

The Falling Three Methods bear pattern is a continuation pattern that represents a break in the trend of prices without causing a reversal. They are days of rest in the market action and can be used to add to positions, if already in the market. The psychology behind a move like this is that some doubt creeps in about the ability of the trend to continue. This doubt increases as the small-range reaction days take place. However, once the bears see that a new high cannot be made, the bearishness is resumed and new lows are set quickly.

A downtrend is under way, a long black day occurs, followed by three days of small real bodies that fall into a short uptrend. It is best if all the bodies of these three days are white but can be mixed. These bodies must all remain within the high low range of the first day's black candlestick. On the fifth day, the bears come in strong to close at a new low. This small uptrend, in between two long black days, is consistent with investors taking a break. The downward trend should continue.

BUY "Falling Three Methods Bear" Candlestick Chart Indicator

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