Investor Glossary-falling three methodsInvestor Glossary-falling three methodsInvestor Glossary-falling three methodsInvestor Glossary-falling three methodsInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Falling Three Methods

The HTML to link to this page
 

The falling three methods is a bearish candlestick charting pattern that displays a short term interruption of a downtrend, but not a reversal -- it's a continuation pattern. A long black candlestick, followed by three consecutive short white (or mixed color) candlesticks, followed by another long black candlestick that closes at a new low, characterizes the falling three methods. Some market technicians, but not all, also require that the fifth candle needs to open lower than the close of the previous day to complete a falling three methods pattern. The short candles in the falling three methods suggest uncertainty about the trend and a potential reversal to the upside. However, with the falling three methods, the short candles must remain within the high-low range of the first black candle, suggesting buyers lack the strength to push a security higher. The fifth black candle in the falling three methods shows that sellers have reasserted control and will continue the downtrend. Traders consider a falling three methods pattern to be a very reliable indicator. The bullish counterpart to the falling three methods is the rising three methods.



Rate this Falling Three Methods definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: quality assurance, minority interest, command economy, Zero Cost Collar, APR, annual return, Key Rate Duration, average price per share, ex-dividend date, phantom income, risk management, in escrow, EBITDA, diluted share, option premium, cancelled check, covered put, required rate of return, labor relations, VIX, balance sheet, current ratio, LIBOR, real GDP, 401a, debt service coverage, 1031 exchange, margin rate, 144a, liquidity ratio, class C shares, wholly-owned subsidiary, deferred tax, irrevocable trust, 1035 exchange, stock market close, deferred revenue, implied volatility, reverse mortgage, retained earnings, dividends payable, inflation, stock split, open position, limit order, ex-dividend, FICO score, FTSE, per diem


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use