Rising Three Methods Candlestick Pattern: How to Confirm & Trade It Successfully

Momentum in the market doesn’t always move in a straight line. Sometimes, an uptrend takes a break before continuing its climb.

The Rising Three Methods candlestick pattern signals a temporary pause in a bullish trend before the price resumes moving higher.

Understanding this pattern can help traders recognize when a pullback is just a pause rather than a reversal. This guide explains how the Rising Three Methods works, what it tells traders about market sentiment, and how to use it effectively.

The Rising Three Methods is a bullish continuation pattern that forms during an uptrend. It consists of five candles, starting with a strong bullish candle, then three small bearish candles, and ending with another strong bullish candle that closes above the first candle’s high.

This pattern suggests that while sellers tried to push the price lower, buyers maintained control. The final bullish candle confirms that the uptrend remains intact.

Key Characteristics

• It appears to be in an uptrend, signaling that buying pressure is still strong.
• The first candle is large and bullish, showing strong momentum.
• The next three smaller bearish candles stay within the range of the first candle.
• The final candle is large and bullish, closing above the first candle’s high.
• Confirms that buyers have regained control after a brief pullback.

The Rising Three Methods candlestick pattern is illustrated below.

• Forms during an uptrend, signaling trend continuation.
• Starts with a large bullish candle, showing initial momentum.
• Followed by three small bearish candles, indicating a controlled pullback.
• Ends with a large bullish candle that confirms trend continuation.
• The bearish candles must stay within the range of the first candle.

This pattern tells a story of temporary weakness before strength resumes. The first large bullish candle represents strong buying momentum. The next three small bearish candles suggest that some traders are taking profits, but selling pressure is weak, as the price stays within the range of the first candle.

The final strong bullish candle confirms that buyers have taken back full control, resuming the uptrend. The small bearish candles represent a moment of hesitation, but they do not indicate a trend reversal. Instead, they show a period of consolidation before another move higher.

Market Conditions

The Rising Three Methods works best in strong uptrends. The small bearish candles act as a healthy pullback, allowing new buyers to enter before the next move. If this pattern appears near support levels, it strengthens the case for a continuation.

Volatility Considerations

In high-volatility markets, the small bearish candles may have larger price swings, but they should still remain within the range of the first candle. In low-volatility environments, the pullback may be more controlled, making the pattern more reliable.

• Stop-loss placement: Below the low of the first candle to protect against false breakouts.
• Entry strategy: Traders often enter after the final bullish candle confirms trend continuation.
• Profit target: Use previous resistance levels or a risk-reward ratio (e.g., 2:1) to set an appropriate exit.

• Small bearish candles close below the first candle’s low: This invalidates the pattern.
• The final bullish candle fails to close above the first candle’s high: Without confirmation, the pattern loses reliability.
• Strong selling pressure after the pattern completes: If the price starts dropping after the last bullish candle, the trend may not continue.
  

To trade the Rising Three Methods in a systematic approach:

1. Identify a strong uptrend before the pattern forms.
2. Detect a large bullish candle, followed by three smaller bearish candles staying within its range.
3. Require confirmation: Enter long only if the final bullish candle closes above the first candle’s high.
4. Set stop-loss below the first candle’s low.
5. Backtest before using real capital.

Traders should always test historical data before using this pattern in live trading systems.

Below is a simple AFL script to detect the Rising Three Methods in Amibroker:

// Rising Three Methods AFL Code for Amibroker

_SECTION_BEGIN(“Rising Three Methods”);

FirstBullish = Ref(Close, -4) > Ref(Open, -4);

ThreeSmallBearish = Ref(Close, -3) < Ref(Open, -3) AND Ref(Close, -2) < Ref(Open, -2) AND Ref(Close, -1) < Ref(Open, -1);

WithinRange = Ref(High, -3) < Ref(High, -4) AND Ref(Low, -3) > Ref(Low, -4) AND 

              Ref(High, -2) < Ref(High, -4) AND Ref(Low, -2) > Ref(Low, -4) AND 

              Ref(High, -1) < Ref(High, -4) AND Ref(Low, -1) > Ref(Low, -4);

FinalBullish = Close > Open AND Close > Ref(High, -4);

RisingThreeMethods = FirstBullish AND ThreeSmallBearish AND WithinRange AND FinalBullish;

PlotShapes(IIf(RisingThreeMethods, shapeStar, shapeNone), colorGreen, 0, Low);

_SECTION_END();

This script finds Rising Three Methods patterns and marks them with a green star.

The Rising Three Methods candlestick is a bullish continuation pattern that signals a temporary pause in an uptrend before it resumes. Traders use this pattern to confirm trend strength before entering a long position.

Using risk management and waiting for confirmation can help traders avoid false signals. If you want to incorporate this pattern into your strategy, test it in different markets before using it in live trading.

Links to articles about other Candlestick Patterns

1. Doji
2. Hammer
3. Inverted Hammer
4. Bullish Engulfing
5. Bearish Engulfing
6. Morning Star
7. Evening Star
8. Shooting Star
9. Hanging Man
10. Piercing Pattern
11. Dark Cloud Cover
12. Three White Soldiers
13. Three Black Crows
14. Dragonfly Doji
15. Gravestone Doji
16. Spinning Top
17. Marubozu
18. Tweezer Top
19. Tweezer Bottom
20. Bullish Harami 
21. Bearish Harami
22. Rising Three Methods
23. Falling Three Methods
24. Bullish Abandoned Baby 
25. Bearish Abandoned Baby 
26. Bullish Kicker 
27. Bearish Kicker
28. Three Inside Up
29. Three Inside Down
30. Upside Gap Two Crows
31. Mat Hold
32. Upside Tasuki Gap
33. Downside Tasuki Gap