The Falling Three candlestick pattern is a powerful bearish candlestick continuation pattern.
It consists of five candles. It occurs in an downtrend siginfying that the market is in a brief consolidation period followed by it's downtrend move.
The Falling Three Candlestick Pattern
For the candlestick continuation pattern to be confirmed as the Falling Three Candlestick Pattern following criteria must be fulfilled:
The opposite is true for the case of the rising three candlestick pattern.
The text book perfect Falling Three is formed infrequently. However in reality some flexibility could be applied.
Sine the candlestick analysis is a subjective notion, the details on the formation of candlestick continuation pattern as explained above might change from one trader to another from their viewpoint of experience and knowledge base.
For example, the candles that trend upward to form a counter trend to an existing trend may contain more than just three candles. The requirement is that the counter trend must remain wihtin the range of the first day full bodied bearish candle.