Upside Gap Three Methods Candlestick: Summary
The upside gap three methods candlestick is another rare candlestick, so take the performance numbers with a large dose of skepticism. The pattern is supposed to act as a bullish continuation, but I found it really functions as a bearish reversal. However, the reversal rate is what I call “near random.” The frequency rank is 85, so you may not be able to find this pattern often enough to consider trading it. However, based on the few samples, it performs quite well in most markets 10 days after the breakout.
Upside Gap Three Methods Candlestick: Important Results
Theoretical performance: Bullish continuation Tested performance: Bearish reversal 59% of the time Frequency rank: 85 Overall performance rank: 27 Best percentage meeting price target: 39% (bull market, up breakout) Best average move in 10 days: 4.92% (bull market, up breakout) Best 10-day performance rank: 12 (bull market, up breakout) All ranks are out of 103 candlestick patterns with the top performer ranking 1. “Best” means the highest rated of the four combinations of bull/bear market, up/down breakouts. The above numbers are based on hundreds of perfect trades. See the glossary for definitions. |  Upside Gap Three Methods |
Upside Gap Three Methods Candlestick: Discussion
The overall performance rank is 27, which is quite high. Looking at the numbers, we find that the best average move 10 days after the breakout is a rise of 4.92% in a bull market. That ranks 12th, but it is well short of the 6% move that I consider good.
Upside Gap Three Methods Candlestick: Identification Guidelines
| Characteristic | Discussion |
| Number of candle lines | Three. |
| Price trend leading to the pattern | Upward. |
| Configuration | Look for two tall white candles in an upward price trend. There should be a gap between them, including between the shadows. The last day is a black candle that fills the gap created by the first two days. |
Upside Gap Three Methods Candlestick: Three Trading Tidbits
- Upside gap three methods candles that appear within a third of the yearly low act as reversals most often — page 876.
- Select tall candles for the best performance — page 873.
- Expect a downward breakout — page 876.
Upside Gap Three Methods Candlestick: Example
Imagine shorting the stock on the downward breakout from this upside gap three methods candlestick. Wow! Price moves up leading to the candle and then breaks out downward the day after the pattern completes. Thus, the candle is a reversal of the upward trend. But the downtrend last just a day before beginning its rise to a new high, and a strong trend it is, too, soaring almost 40% in a month.
