iCharts Discussions

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Dark Cloud Cover

Dark Cloud Cover is a bearish pattern which means it forms at the top of uptrends and it makes the uptrend reverse and go down.

Dark Cloud Cover forms by a bearish candle that opens above the close price of the previous bullish candle, and goes down and covers most part of the body of the previous bullish candle. It finally closes a little above the open price of the previous candle.

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Pirecing Line


Piercing Line is the bullish form of Dark Cloud Cover pattern. It forms at the bottom of a downtrend or a bearish market. It forms by a bullish candle that opens below the close price of a bearish candle, goes up and covers most part of the body of the bearish candle and finally closes a little below the open price of the previous bearish candle.

[ravib99]

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Rising Three Method


The rising three method candlestick pattern is a bullish continuation pattern. This pattern indicates to traders that a bullish trend is continuing even after there is a temporary stop in trading. This pattern typically occurs after an uptrend and it ideally consists of five candles, but it must consist of more than three candlesticks.

In order to identify the rising three method pattern there are certain criteria that must be met. First, an uptrend must be in progress. Second, a long green candle forms on the first day. Third, a group of small real bodies, preferably red bodies, occur and follow a brief downtrend pattern. Ideally, this group of small real red bodies occurs on the second, third, and fourth days, again following a brief downtrend pattern, however they all stay within the trading range of the first day. Lastly, on the fifth day, a long green candle closes above the close of the first day. Remember that the close of any of the small real bodies should not close lower than the open of the first day’s long green candle.

The rising three method candlestick pattern indicates that there is a rest in the battle between the bulls and the bears. This rest is evident in the presence of the small real red bodies. The first red candle worries the bulls, and it does again the following day, but by the third day their tensions are eased. This is because on the fifth day the bulls come in strong to close at new highs realizing that the bears cannot push prices down any further.

Ideally the small real bodies that occur in this pattern are red however, they don’t have to be. These small real bodies can be a mixture of red and green candlesticks. As noted above, this pattern ideally consist of five candles, however it only must consist of more than three candles. The first and the last candlesticks must be green long bullish candles. This signal is highly reliable when all of the middle candlesticks are bearish (red).

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Falling Three Method


The falling three method candlestick pattern is a bearish continuation pattern and it is the opposite of the rising three method candlestick pattern. This pattern indicates to traders that a bearish trend is continuing even after there is a temporary stop in trading. This pattern typically occurs after a downtrend and it ideally consists of five candles, but it must consist of more than three candlesticks.

In order to identify the falling three method pattern there are certain criteria that must be met. First, a downtrend must be in progress. Second, a long red candle must form the first day. Third, a group of small real bodies, preferably green bodies, occur and follow a brief uptrend pattern. Ideally, this group of small real bodies occurs on the second, third, and fourth days. Again, they should follow a brief uptrend pattern however they all should stay within the trading range of the first day. Last, on the fifth day, a long red candle should close below the close of the first day’s long red candle. It is important to remember that the close of any of the small real bodies should not close higher than the open of the first day’s long red candle.


The falling three method candlestick pattern indicates that there is a rest in the battle between the bulls and the bears. This rest is apparent in the presence of the small real white bodies and these bodies are seen as counter trend days. As a result, these small white bodies worry the bears temporarily. The bears then see that the bulls are unable to bring the price to new highs after a significant downtrend. Prices are taken to new lows which then boost the confidence of the bears and selling resumes.

Ideally the small bodies that occur in this candlestick pattern are white however they don’t have to be. These small bodies can be a mixture of green and red candles. As mentioned previously, this pattern ideally consists of five candles however it must consist of more than three candles. The first and last candles must be red long bearish candles. The falling three method signal is highly reliable of trend continuation and the reliability increases with the shortening of the middle candlestick’s real bodies and with a reduction in trading volume on those small real bodies. Confirmation of this candlestick pattern is suggested and can occur in the form of a new candlestick with a lower closing.