The so-called three-pattern pattern includes the bullish rising three (candle line) method and the bearish falling three (candle line) method (please note that here we have encountered the number 3 unexpectedly). Both types of patterns are continuous patterns. The criteria for determining the three rising patterns (as shown in Figure 7.25) include the following:
- The first thing that appeared was a long white candle line.
- After this white candle line, it is followed by a group of small solid candle lines descending in sequence. The ideal number of small entity candle lines is 3, but if there are 1 or 2 more than 3, it is also acceptable, provided that this group of small entity candle lines are basically limited to the long one in front. Within the price range of the white candle line. We may wish to understand this: since these smaller groups of candles are within the price range of the first day, together with the longest candle line at the front, they form a price pattern similar to the three-day pregnancy line pattern (In this form, the so-called price range of the first candle line refers to the group of small candle lines are within the range of the upper and lower shadows of the candle line; and in the real pregnancy line form, Only the entity of the small candle line is included in the entity of the previous candle line). Small candle lines can be white or black, but black candle lines are the most common.
- The last day should be a candle line with a solid white entity, and its closing price market is higher than the closing price of the first day. At the same time, the opening price of the last candle line should also be higher than the closing price of the previous day.
This pattern is similar to the bullish flag or bullish triangle flag pattern in Western technical analysis theory. However, the theoretical origin of the ascending three-pattern form can be traced back to the 18th century. It is generally believed that the three-pattern form represents the third trading strategy other than buying and selling-rest, and also represents a truce between the bull and the bear. To describe it in a more fashionable way, the market has obtained a “breathing opportunity” through this group of small candle lines.
The three-decline pattern (as shown in Figure 7.26) and the ascending three-pattern pattern are completely equivalent in graphics, only in the opposite direction. The formation process of this type of pattern is as follows: the market should be in a downward trend, the first appearance is a long black candle line. After this black candle line, followed by about three successive small candle lines (usually, they are all white), and the entities of this group of candle lines are all limited to the scope of the first candle line (including its Upper and lower shadows). On the last day, the opening price should be lower than the closing price of the previous day, and the closing price should be lower than the closing price of the first black candle line. When the last black candle line is formed, the market will decline. This pattern is similar to bearish flag or bearish pennant.