What is the lower three methods? Explaining candlestick patterns that indicate the continuation of a downtrend

2024-06-26

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[Summary]

A downward trend is a continuation candlestick pattern in which there is a temporary rebound in the middle of a downward trend, and then a downward trend.

This indicates that the return is weak and selling pressure remains. Even if the price recovers a little in the middle of a decline, it is a sign that buyers have not regained control.

What is the lower three methods?

The lowering three methods are generally seen as follows.

A big shadow line appears
Several small positive lines and small movements continue.
Go down again with a big shadow line

Even if there is a temporary rebound, the downward trend remains unbroken.

Points to see

Points to see	meaning
appear in a downtrend	tends to become a continuous pattern
return is small	weak buying power
Finally, it goes down with a hidden line.	Selling is back
Volume increases	Confidence in continued decline increases

Points to note

Even if it looks like the market is on the decline, if it rises with a large volume during the reversal phase, there is room to suspect a reversal.

In addition to looking at the shape, we also look at the positional relationship with support lines and moving averages. This is to distinguish whether the return is small or a preparation for reversal.

Summary

The downtrend is a pattern used to check whether the downtrend continues.

When managing the risk of stocks you own, you can use this as an indicator to see if stocks have fallen again with weak returns.