As of 10/29/2020
  Indus: 26,659 +139.16 +0.5%  
  Trans: 11,184 +237.90 +2.2%  
  Utils: 868 +2.32 +0.3%  
  Nasdaq: 11,186 +180.72 +1.6%  
  S&P 500: 3,310 +39.08 +1.2%  
YTD
-6.6%  
 +2.6%  
-1.3%  
 +24.7%  
 +2.5%  
  Targets    Overview: 09/29/2020  
  Up arrow29,300 or 27,400 by 11/01/2020
  Up arrow12,000 or 11,000 by 11/01/2020
  Up arrow915 or 840 by 11/01/2020
  Up arrow12,800 or 11,300 by 11/01/2020
  Up arrow3,700 or 3,400 by 11/01/2020
CPI (updated daily): Arrows on 10/23/20
As of 10/29/2020
  Indus: 26,659 +139.16 +0.5%  
  Trans: 11,184 +237.90 +2.2%  
  Utils: 868 +2.32 +0.3%  
  Nasdaq: 11,186 +180.72 +1.6%  
  S&P 500: 3,310 +39.08 +1.2%  
YTD
-6.6%  
 +2.6%  
-1.3%  
 +24.7%  
 +2.5%  
  Targets    Overview: 09/29/2020  
  Up arrow29,300 or 27,400 by 11/01/2020
  Up arrow12,000 or 11,000 by 11/01/2020
  Up arrow915 or 840 by 11/01/2020
  Up arrow12,800 or 11,300 by 11/01/2020
  Up arrow3,700 or 3,400 by 11/01/2020
CPI (updated daily): Arrows on 10/23/20

Bulkowski on the Upside Gap Three Methods

 

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.

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My book, Encyclopedia of Candlestick ChartsEncyclopedia of Candlestick Charts book., pictured on the left, takes an in-depth look at candlesticks, including performance statistics.

If you click on the above link and then buy the book (or anything) while at Amazon.com, the referral will help support this site. Thanks.

-- Tom Bulkowski

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Important Results
Discussion
Identification Guidelines
Three Trading Tidbits
Example
See Also

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.

The ideal upside gap three methods candlestick
Upside Gap Three Methods

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Upside Gap Three Methods Candlestick: Discussion

The upside gap three methods candlestick is supposed to act as a bullish continuation pattern, but my tests revealed that it functions as a bearish reversal 59% of the time. I consider that "near random" because you cannot tell with any accuracy which direction the breakout will occur.

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

CharacteristicDiscussion
Number of candle linesThree.
Price trend leading to the patternUpward.
ConfigurationLook 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.

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Upside Gap Three Methods Candlestick: Three Trading Tidbits

If you want a few bones from my Encyclopedia of candlestick charts book, here are three to chew on. The pages refer to the book where the tips appear.

  1. Upside gap three methods candles that appear within a third of the yearly low act as reversals most often -- page 876.
  2. Select tall candles for the best performance -- page 873.
  3. Expect a downward breakout -- page 876.

The upside gap three methods candlestick on the daily scale

Upside Gap Three Methods Candlestick: Example

The upside gap three methods candlestick appears on the daily chart circled in red. The first two candles are white ones, tall and handsome with a gap between them. The last day a black candle fills the gap. That means the price action opens above the lower shadow of the second day and has a low below the upper shadow of the first day.

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.

-- Thomas Bulkowski

 

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See Also

 

Support this site! Clicking any of the books (below) takes you to Amazon.com. If you buy ANYTHING while there, they pay for the referral.

My novels:  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

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