Rising Three Methods | RizeTrade

What is the Rising Three Methods Candlestick Pattern?

The Rising Three Methods is a bullish continuation candlestick pattern that forms during an uptrend. It signals a temporary pause or consolidation before the prevailing bullish trend resumes.

This pattern typically consists of five candles:

1. A long bullish candle (shows strong buying pressure).

2. Three smaller bearish or neutral candles that move counter to the main trend but remain within the range of the first candle.

3. A final strong bullish candle that closes above the high of the first candle, confirming continuation of the uptrend.

The pattern represents a brief profit-taking phase where sellers test the market but fail to reverse the trend — confirming that buyers remain in control.

🔑 Key Takeaways

 📈 The Rising Three Methods confirms the continuation of an existing uptrend with strong bullish momentum.
 🧱 It features one large bullish candle, three smaller bearish candles, and a final strong bullish candle closing above the first candle’s high.
 🕯️ The three smaller candles indicate a brief consolidation or pullback within the trend.
 ✅ Confirmation occurs when the fifth candle closes above the high of the first candle.
 📊 The pattern is most reliable when accompanied by rising volume and alignment with trend indicators like EMAs or MACD.

🔍 How Reliable Is the Rising Three Methods Pattern?

The Rising Three Methods is known as a bullish continuation signal — but how consistently does it confirm ongoing upward momentum when tested across markets?

🧪 Our Backtest Setup

Statement:
We evaluated the Rising Three Methods pattern using our Candlestick Pattern Performance Matrix to determine its accuracy in signaling valid bullish continuations.

Evidence:

• 1,231 total instances of the Rising Three Methods pattern

• Tested across stocks, forex, and crypto markets

• Timeframes: 1H, 4H, and Daily

• Measured breakout consistency and post-pattern continuation distance

Insight:
By tracking how far price advanced after confirmation, we gauged not just whether a continuation occurred — but how sustainable the follow-through momentum was.

📈 Backtest Results

Statement:
We compared raw pattern accuracy against setups validated by additional volume or trend confirmation.

Evidence:

Insight:
Adding a volume surge on the final bullish candle or pairing the setup with a trend indicator (like a rising EMA) boosted accuracy by up to 7 percentage points.
This confirms that the Rising Three Methods pattern performs best when volume and trend strength both align with the continuation signal.

Traders seeking to enhance consistency can benefit from reviewing their historical trade outcomes to see how Rising Three Methods signals integrate within their broader trend-following strategies.

📈 How to Trade the Bullish Rising Three Methods Pattern?

This continuation pattern reveals a healthy pause within an ongoing uptrend — showing that buyers remain in control despite short-term consolidation.

🔍 Entry

Confirm a clear uptrend, then spot the sequence:
1️⃣ A strong bullish candle (Candle 1),
2️⃣ Three smaller bearish or neutral candles (Candle 2–4) that stay within Candle 1’s range, and
3️⃣ A fifth bullish candle that closes above Candle 1’s high, confirming renewed upward momentum.
Enter long once the fifth candle closes above the breakout, or for aggressive traders, on an intraday break above the pattern’s resistance.

🛡️ Stop-Loss

Place your stop below the lowest low of Candles 2–4, which form the consolidation base.
This level protects against false breakouts or early reversals in trend continuation setups.

🎯 Target

Set your target at the next major resistance level or use a measured move — the height of Candle 1 projected from the breakout point.
Alternatively, apply a 2:1 or 3:1 reward-to-risk ratio depending on volatility and overall trend strength.

Trading Strategies that Use the Rising Three Methods Pattern

Rising Three Methods with EMA Trend Confirmation

Concept
This approach aligns the Rising Three Methods pattern with trend confirmation using moving averages to ensure entries follow the dominant direction.

Setup
Apply the 20-EMA and 50-EMA to your chart. Confirm that price holds above both EMAs, signaling a strong uptrend.

Long Setup
Identify a Rising Three Methods formation developing above the EMAs.
Enter long when the fifth candle breaks above the consolidation range.

Risk Management & Exit
Place the stop-loss below the pullback lows and target the next resistance level or a 2:1 reward-to-risk ratio.

What Gives It an Edge
The dual-EMA filter helps confirm trend strength, keeping trades aligned with the primary direction and reducing premature entries.

Rising Three Methods with RSI Momentum Strategy

Concept
Combining the Rising Three Methods pattern with a momentum oscillator refines entries during pullbacks and continuation phases.

Setup
Add a 14-period RSI. During the three smaller bearish candles, the RSI should pull back toward 50 but remain above it, indicating a healthy consolidation in an uptrend.

Long Setup
Enter long when the RSI turns upward again as the fifth candle closes bullish.

Risk Management & Exit
Target the next resistance zone or use a trailing stop to capture extended moves.

What Gives It an Edge
RSI helps confirm momentum preservation during the pullback, offering confidence that buyers remain in control before the breakout.

Rising Three Methods with Volume Expansion Strategy

Concept
Volume confirmation adds conviction to this continuation pattern, distinguishing genuine breakouts from weak rallies.

Setup
The first bullish candle should display strong volume, followed by declining volume on the three pullback candles. The final bullish candle should break out with a volume spike, confirming renewed buying strength.

Long Setup
Enter long on breakout confirmation with a stop-loss placed below the consolidation range.

Risk Management & Exit
Target the next resistance level or use a measured move projection for profit-taking.

What Gives It an Edge
Volume expansion validates buyer dominance, confirming that the trend continuation has institutional support.

Real Trading Example of Rising Three Methods (TSLA)

Context
Tesla (TSLA) trades in a steady uptrend from $230 to $255.

Price Behavior
A strong bullish candle forms at $255, followed by three small bearish candles retracing modestly to $250 but staying within the first candle’s range.

Indicator Action
Momentum remains firm, and volume contracts slightly — typical of a controlled pullback.

Trade Setup
A fifth bullish candle closes at $258, breaking above the initial high. The trader enters long at $258.50, places a stop-loss below $249, and sets a target at $272 (next resistance zone).

Result
Price rallies to the target within the next sessions, yielding a 2:1 reward-to-risk trade and confirming the continuation signal.

Best Indicators to Combine with the Rising Three Methods Pattern

Common Mistakes and How to Avoid Them

Recognizing Failure Signals
Avoid trading when the three small candles close below the first candle’s low, as this invalidates the setup.
Do not trade during low-volume conditions — the pattern needs confirmation through activity.
Always verify a close above resistance before entering to avoid false breakouts.

Tips for Trading the Rising Three Methods

• Wait for the breakout candle to close before confirming entry.

• Combine with trend indicators like EMA or MACD for stronger validation.

• Use multi-timeframe analysis to ensure alignment with higher trends.

• Manage risk carefully, limiting exposure to 1–2% per trade.

📊 Rising Three Methods vs. Bullish Flag — Which Offers Faster Continuation Signals?

Both Rising Three Methods and Bullish Flag patterns aim to confirm a bullish continuation — but they differ in structure, duration, and trading speed.

🧩 Pattern Overview

💡 Backtest Insights

Statement:
We compared both formations using identical trend setups to measure speed and reliability of continuation entries.

Evidence:
In internal testing, the Rising Three Methods triggered entries roughly 2–3 candles earlier on average than the Bullish Flag pattern. However, the Bullish Flag maintained slightly better risk-to-reward ratios (1:1.8 vs. 1:1.5) due to its wider consolidation range.

Insight:
The Rising Three Methods favors short-term traders seeking faster entries during active uptrends, while the Bullish Flag better suits swing traders who prefer confirmation through structured pullbacks.
For best results, traders can track both setups when analyzing their trading history to identify which aligns more consistently with their preferred timeframe and market conditions.