How to identify

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

The Rising Three Methods bull 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 bulls see that a new low cannot be made, the bullishness is resumed and new highs are set quickly.

An uptrend is under way, a long white day occurs, followed by three days of small real bodies that show some resistance to the previous trend and may fall into a short downtrend. These reaction days are generally black, but most importantly, their bodies all fall within the high low range of the first day's white candlestick. Remember that the high-low range includes the shadows. The final candlestick, the fifth day, opens above the close of the previous reaction day and then closes at a new high. This small downtrend, in between two long white days, is consistent with investors taking a break. The upward trend should continue.

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