In the candlestick theory, there are two main patterns that are continuous, the Falling Three Methods and the Rising Three Methods.
Falling Three Methods
A long black black day will occur in a downward trend and be followed by three days of small real bodies that create a short upward trend. However, by the fifth day, the bears will step in rather strongly and cause the market to close at a new low rate. This small upward trend that occurs between two long black days reflects the consistent behavior of the investors taking a small break. This downward trend will usually continue for a time. It denotes a bearish trend and has a high rate of reliability.
1) The first day will be a long black day.
2) The second, third, and fourth days that follow will have small real bodies. The rates will remain within the range of the beginning day and will follow a brief period of an upward trend.
3) The fifth day is a long black day. When the market closes on this day, it will close at rates that are below the rates the market closed with on the first day.
Rising Three Methods
During an upward trend, a long white day will occur that is followed with three days in which small real bodies have fallen into a short downward trend. Again, this trend is indicative of the investors taking a small break. At the close of the fifth day, the market will close at a new high rate, this results when because the bulls have came in strong. This method also indicates a bullish trend and has a high reliability rate.
1) The first day will be a long white day.
2) The second, third, and fourth days that follow small real bodies. The rates reflect a brief downward trend, but still remain within the range that the market had on the first day.
3) The fifth day is a long white day. At closing time on this day, the market will have rates that are above those on the first day of closing.