Continuation Patterns: Rising Three & Falling Three Methods

🔁 Introduction: Riding the Trend, Not Fighting It

Not all candlestick patterns signal a reversal — some indicate that a trend is likely to continue. In crypto markets, where momentum often carries price over long stretches, learning how to spot continuation patterns can help you avoid early exits or bad counter-trend trades.

Two of the most reliable continuation patterns are:

• Rising Three Methods (bullish trend continuation)
• Falling Three Methods (bearish trend continuation)

These patterns tell you: “The trend paused… but it's not done yet.”

📈 Rising Three Methods – Bullish Continuation

✅ Definition

The Rising Three Methods pattern signals a pause in an uptrend — but not a reversal. It’s made up of five candles:

1. Strong bullish candle
2. Three small bearish candles — all within the range of the first bullish candle
3. Another strong bullish candle that closes above the first candle’s high

This structure tells us the bulls are taking a breath — but haven’t lost control.

🔍 Key Features

• The 3 small red candles should not break below the low of the first green candle
• The 5th candle should close above the first candle’s high
• Volume typically drops during the 3 bearish candles and spikes on the 5th

🧠 Interpretation

The small red candles show temporary selling pressure, but the strong finish confirms bulls are still in charge. This pattern often appears in strong trending markets — perfect for trend-following crypto traders.

📉 Falling Three Methods – Bearish Continuation

✅ Definition

The Falling Three Methods is the bearish counterpart. It appears during a downtrend and signals that the sellers are still in control after a brief pause.

The pattern includes:

1. Strong bearish candle
2. Three small bullish candles — staying within the first candle’s body
3. Another strong bearish candle that closes below the first candle’s low

🔍 Key Features

• Small green candles must not close above the first red candle
• The final red candle confirms resumed selling pressure
• Works best in trending markets or with bearish news/sentiment

🆚 Comparison Table

📊 When to Trade It

✅ Ideal Conditions:

• Clear existing trend (don't use in sideways markets)
• Appears near a support/resistance breakout
• Confirmation candle closes outside the consolidation range
• Stronger with volume confirmation on the 5th candle

❌ Avoid When:

• Market is in a range or choppy sideways zone
• The 3 inside candles are too large (may indicate reversal instead)
• There’s conflicting signals from RSI/MACD

💡 Pro Tips

• Use this pattern on higher timeframes like 4H or 1D for better reliability
• Combine with moving averages — e.g., 20 EMA holding as support/resistance
• Add to breakout strategies — this pattern often leads to explosive moves

📘 Real Crypto Example – Rising Three on BTC

BTC in strong uptrend

1D chart shows big green candle followed by 3 small reds

5th candle breaks out on volume

Price rallies from $40,000 to $44,000 in 3 days ✅

✅ Conclusion

The Rising Three Methods and Falling Three Methods patterns help you stay with the trend, not fight it. They signal that a pullback is just a pause — not a reversal. Use them to spot continuation setups and avoid getting shaken out too early.

Just remember:

• Always confirm with volume
• Use in clear trends only
• Add support tools like RSI, EMA, or trendlines