Rising/Falling Three Methods Candlestick Pattern: What It Means
Rising and falling three methods is a five-candle continuation pattern: one strong candle, a few small candles moving the other way, then another strong candle in the original direction. It is not a reversal. The small middle candles are read as a pause, not a turn, so the pattern hints that the trend may resume.
How It Forms
A candle records one stretch of trading. The body is the box between open and close, and the wicks are thin lines running out to the high and low. When the close is above the open the candle is bullish, and when it is below the candle is bearish. A trend is a stretch of prices moving mostly one way; a continuation pattern is read as a sign it may keep going. A pattern is called bullish when it hints at rising prices and bearish when it hints at falling ones.
The rising version appears in an uptrend: a strong bullish candle, three small bearish candles that stay inside its range, then another strong bullish candle. The falling version mirrors it in a downtrend: a strong bearish candle, small bullish candles inside its range, then another strong bearish candle. "Inside its range" means each small candle's high and low sit between the first candle's high and low. The drawing shows the rising version.
| Candle (made-up prices) | Open | High | Low | Close |
|---|---|---|---|---|
| 1 | $12 | $33 | $10 | $31 |
| 2 (pullback) | $29 | $30 | $25 | $26 |
| 3 (pullback) | $27 | $28 | $22 | $23 |
| 4 (pullback) | $25 | $26 | $20 | $21 |
| 5 | $22 | $43 | $20 | $41 |
Candle 1 climbs from $12 to $31 on a range of $10 to $33 (all made-up prices). Candles 2, 3 and 4 close lower each time ($26, $23, $21), a $10 pullback, and their highs and lows all stay inside the $10 to $33 range. Candle 5 opens at $22 and closes at $41, above candle 1's high, and the uptrend resumes.
How to Read It
Read the pause, the resumption and the version.
- The pause. The small middle candles are a rest. In the drawing the pullback is $10, against the $19 rise before it.
- The resumption. The last strong candle restores the original direction, closing at $41, above every earlier high.
- The two versions. Rising, in an uptrend, is bullish. Falling, in a downtrend, is bearish.
What to Watch For
The range is the rule to check: if the small pullback candles break out of the first candle's range, the case for continuation is broken. In the drawing, the highest pullback high is $30, under the first candle's $33 high.
Two patterns share part of the idea but differ in shape:
- A marubozu is one long-bodied candle with little or no wick. Three methods can start and end on strong candles, but it takes five, and the small ones between them are the point.
- Three white soldiers is three strong rising candles in a row. In three methods, small candles moving the other way split the strong ones apart: a pause inside momentum.
Free or Premium
Rising/Falling Three Methods is an extended pattern, one of 10. Rapunzl Premium covers its chart marker, while Rapunzl's Stock Scanner lists it in the pattern filters for free.
Try It in Rapunzl
Choose a Candlestick or OHLC chart, open Customize Chart → Chart Indicators → Levels, Patterns & AI Charts and switch on Pattern Markers. Markers point up (▲) for bullish patterns and down (▼) for bearish ones, and a detected-patterns list appears below the chart. Rising/Falling Three Methods shows up once you switch on the opt-in that adds 10 advanced patterns to the 13 core ones; that opt-in belongs to Rapunzl Premium.
The pattern has a bullish and a bearish version, so the Stock Scanner lists it in both the Bullish candlestick and Bearish candlestick filters. The idea "Bullish candlestick today" covers bullish patterns and warns that candlestick patterns are hints, not promises.
A 15-Minute Class Activity
The Human Chart. Groups of five each get paper, a ruler and the made-up falling-version cards below, one card per student.
| Card (made-up prices) | Open | High | Low | Close |
|---|---|---|---|---|
| 1 | $60 | $61 | $38 | $40 |
| 2 | $41 | $45 | $40 | $44 |
| 3 | $43 | $47 | $42 | $46 |
| 4 | $45 | $49 | $44 | $48 |
| 5 | $47 | $48 | $30 | $31 |
- 4 minutes. Students stand in card order, and the group draws the five candles on one sheet.
- 5 minutes. The group draws two lines across the sheet, at card 1's high ($61) and low ($38), and checks cards 2, 3 and 4 against them. All three pass. Card 5 closes at $31, below card 1's low, so the downtrend resumes.
- 3 minutes. Twist: card 3's high becomes $64. What happens to the pattern? (It passes card 1's $61 high, so the continuation case is broken.)
- 3 minutes. Exit ticket: complete the sentence, "The small middle candles show a pause, not a turn, because ..."
Related Patterns
- Marubozu: one strong candle with little or no wick.
- Three White Soldiers: three strong rising candles in a row, with no pause between them.
- How to Read a Candlestick Chart: bodies, wicks and direction.
- Support and Resistance Levels: the price levels where a pullback may pause.
Frequently Asked
Questions
Picture an uptrend with a strong rising candle, a few small falling candles inside its range, then another strong rising candle.
No. It is a continuation pattern, so it hints the trend may resume.
Direction. The rising version sits in an uptrend and is bullish. The falling version sits in a downtrend and is bearish, with the small candles moving up instead of down.
See Patterns in Action With Rapunzl
Request a demo to see how Rapunzl's charts and simulator help students practice reading price trends. Families exploring at home can look at our parents page.
Indicators, patterns and examples in this article are for education and are not investment advice or a recommendation to buy or sell any security.
By Myles Gage, CEO & Co-Founder at Rapunzl.