A long candle, then three small counter-moves that stay inside its body, then another long candle. The rest is over; the trend resumes. Sakata's classic continuation pattern.
Rising Three Methods and Falling Three Methods belong to the sanpou ("three methods") group of Sakata's five formations. Each is a five-candle continuation pattern.
It appears in the middle of a trend and signals that the market is not reversing here, but pausing to catch its breath before continuing in the same direction. In a candlestick vocabulary dominated by reversal signals, this is one of the few clear patterns for continuation.
The shape runs like this. First a large candle prints — for the Rising version, a long bullish candle. Then three small counter-trend candles follow, each contained within the range of that first body. They drift lower, but never exceed the first candle's high or break its low. Finally, a fifth candle prints — another long bullish one — swallowing all three counter-candles and declaring the trend back on.
Falling Three Methods is the same shape inverted: the continuation version inside a downtrend.
How to Read
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The name sanpou comes from Sakata's idea that a trader has not two but three choices: buy, sell, and rest — do nothing. The three counter-candles are precisely that rest made visible.
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