Rising Three Methods Pattern on Live Gold

What it shows

Each one gets a blue label marked R3M under the low of the fifth candle.

How Pravex works it out

1. What counts as long or small for the rising three methods moves with the market, since the yardstick is a 14-candle exponential average of body sizes, where a body is the distance from open to close, so a quiet stretch lowers it and a busy one raises it.
2. The rising three methods starts with a rising candle (close above open) whose body is long, above the average.
3. The three middle candles must each be small (below the average body), with a high no higher than the first candle’s high and a low no lower than the first candle’s low. Their colour does not matter.
4. The fifth candle must be rising with a long body and close above the first candle’s close.
5. For the rising three methods, the trend test runs on the first of the five candles, which by default has to close above its 50-candle simple moving average to count as an uptrend; on the first 49 candles, where the average can’t be measured yet, nothing is marked.

Settings

Setting	Default	What changing it does
Trend check	SMA50	How the uptrend before the rising three methods is measured on the first candle: SMA50 compares its close with the 50-candle simple average. The choice that adds SMA200 also needs the 50-candle average above the 200-candle one, so fewer rising three methods labels appear, and the last choice turns the check off.
Label colour	Blue (#2196F3)	Colours the R3M label that sits under the low of the candle completing the rising three methods, with the R3M letters always in white.

How traders read it

This is a continuation pattern. The three small candles are a pause in which sellers could not push the price out of the first candle’s range. When the fifth candle closes above the first one, the buyers have resumed from a higher base.

The low of the first candle is the line the pause never broke, and it is the usual stop. A trader already long can read the pattern as a reason to hold, and one who missed the first leg can see the fifth close as a second entry.

When it misleads

Five candles have to line up, so the pattern is rare. Our code checks only the size and range of the middle candles, not their colour, so a pause made of rising candles counts as well as the textbook falling ones. In a choppy market a long candle, a quiet patch and another long candle can line up by chance. For the rising three methods, one close above the 50-candle average counts as an uptrend. Wait for the close before trusting a rising three methods label on the latest candle, which is checked on each update and can lose its label.

Questions and answers

What is rising three methods?

Five candles in a rise: a long rising candle, three small candles inside its range, and a long rising candle that closes above the first.

Do the middle candles have to be falling?

Not in Pravex. They have to be small and stay inside the first candle’s high and low. Their colour is not checked.

Does rising three methods have a bearish twin?

Falling three methods: a long falling candle, three small candles inside it, then a long falling candle that closes below the first.

Related: Falling Three Methods - Bearish, Three White Soldiers - Bullish, Upside Tasuki Gap - Bullish, All Candlestick Patterns, every indicator.