Falling Three Methods: Important Results
Theoretical performance: Bearish continuation
Tested performance: Bearish continuation 71% of the time
Frequency rank: 91
Overall performance rank: 89
Best percentage meeting price target: 40% (bull market, down breakout)
Best average move in 10 days: 4.58% (bull market, up breakout)
Best 10-day performance rank: 20 (bull market, up breakout)
thepatternsite.com/Falling3Methods.html
Look for a series of five candles in a downward price trend. The first day should be a tall black candle followed by three up trending small while candles (except the middle of the three, which can be either black or white), followed by another tall black candle with a close below the first day's close. The three middle candles should remain within the high-low range of the first candle.
The falling three methods candlestick pattern is so rare that I do not show in my Encyclopedia of Candlestick Charts book the statistics from the 64 falling three methods that I uncovered. Most of the entries would have been blank. The above important results show more information than the book.
The falling three methods pattern acts as a bearish continuation 71% of the time, giving it a rank of 7 which is very high (1 is best). As I mentioned, it is a rare bird, having a frequency rank of 91 out of 103 candles where 1 means it occurs most often. The overall performance ranks 89th probably due to the few samples available for testing. Just 40% of the candles meet the measure rule price target, which is the height of the candlestick pattern added to (upward breakouts) or subtracted from (downward breakouts) the top or bottom of the candle pattern, respectively. The average move is a rather robust 4.58% in 10 days, where a good move would be 6% or more. The 4.58% move also gives it the 20th best performance rank against the other 103 candle patterns.
Theoretical performance: Bearish continuation
Tested performance: Bearish continuation 71% of the time
Frequency rank: 91
Overall performance rank: 89
Best percentage meeting price target: 40% (bull market, down breakout)
Best average move in 10 days: 4.58% (bull market, up breakout)
Best 10-day performance rank: 20 (bull market, up breakout)
thepatternsite.com/Falling3Methods.html
Look for a series of five candles in a downward price trend. The first day should be a tall black candle followed by three up trending small while candles (except the middle of the three, which can be either black or white), followed by another tall black candle with a close below the first day's close. The three middle candles should remain within the high-low range of the first candle.
The falling three methods candlestick pattern is so rare that I do not show in my Encyclopedia of Candlestick Charts book the statistics from the 64 falling three methods that I uncovered. Most of the entries would have been blank. The above important results show more information than the book.
The falling three methods pattern acts as a bearish continuation 71% of the time, giving it a rank of 7 which is very high (1 is best). As I mentioned, it is a rare bird, having a frequency rank of 91 out of 103 candles where 1 means it occurs most often. The overall performance ranks 89th probably due to the few samples available for testing. Just 40% of the candles meet the measure rule price target, which is the height of the candlestick pattern added to (upward breakouts) or subtracted from (downward breakouts) the top or bottom of the candle pattern, respectively. The average move is a rather robust 4.58% in 10 days, where a good move would be 6% or more. The 4.58% move also gives it the 20th best performance rank against the other 103 candle patterns.