Rising/Falling Three Methods

Install and import#

npm install fintech-algorithms

import { risingFallingThreeMethods } from "fintech-algorithms/price-action-and-candlesticks/multi-candle-patterns/rising-falling-three-methods";

Signature#

risingFallingThreeMethods(input)

Scans five-bar windows for a long candle, three bars whose ranges stay inside it, and a fifth candle of the same colour that closes beyond the first one's close.

Parameters#

Returns#

TopicResult

series.matched is the boolean verdict for the window ending at that index, and series.label is "rising" for the bullish continuation, "falling" for the bearish one, and "none" otherwise. latest carries the last value of each. The warm-up is the four leading bars that cannot close a five-bar window.

Warm-up#

The first 4 bars positions are null. The pattern needs a five-bar window, so both series hold null at indexes 0 through 3 and ready_at is 4. From index 4 onward matched is false or true, and false is a real verdict rather than a warm-up placeholder, so ready_at does not depend on any pattern ever firing. An input of one to four bars returns null throughout, with ready_at null and state "waiting".

Errors#

• When a bar has a non-finite price or volume, a negative volume, a high below its own open/low/close, a low above them, or a timestamp that does not advance — throws Error
• When tick_tolerance is not a finite number or is negative, or doji_body_ratio falls outside 0..1 — throws Error
• When input is not an object, input.parameters is not an object, or bars is not an array holding at least one bar — throws Error

Complexity: time O(n), space O(n).

Worked example#

executed Captured by running this function on the input its own test provides. Real output of real code — but not asserted against a published figure.

Input#

{
  "bars": [
    {
      "timestamp": "2024-01-02",
      "basis": "synthetic-unadjusted",
      "open": 100,
      "high": 101.45,
      "low": 98.695,
      "close": 100,
      "volume": 750000,
      "benchmark": 200
    },
    {
      "timestamp": "2024-01-03",
      "basis": "synthetic-unadjusted",
      "open": 101.49111452,
      "high": 103.38381693,
      "low": 100.05480022,
      "close": 101.78791214,
      "volume": 795117,
      "benchmark": 200.56326135
    },
    {
      "timestamp": "2024-01-04",
      "basis": "synthetic-unadjusted",
      "open": 102.45519048,
      "high": 104.6701838,
      "low": 100.91147007,
      "close": 102.9549389,
      "volume": 840234,
      "benchmark": 201.11020913
    }
  ],
  "parameters": {}
}

Call#

risingFallingThreeMethods(input)

Returns#

object with 9 fields: topic_id, title, state, ready, ready_at, series, latest, parameters, …

{
  "topic_id": "D06-F04-A11",
  "title": "Rising/Falling Three Methods",
  "state": "calculated",
  "ready": true,
  "ready_at": 4,
  "series": {
    "label": [null, null, null, null, "none", "none"],
    "matched": [null, null, null, null, false, false]
  },
  "latest": {
    "label": "none",
    "matched": false
  },
  "parameters": {},
  "diagnostics": {
    "causal": true,
    "input_count": 96
  }
}

Diagrams#

Calculation flow#

flowchart LR
    A["an ordered OHLC sequence, tick size, gap policy, body scal"] --> B["Validate order, basis, and finite values"]
    B --> C["Apply the selected Rising/Falling Three Methods convention"]
    C --> D["Emit value, readiness, and diagnostics"]
    D --> E["Interpret descriptively; test outcomes separately"]
    B -->|invalid or insufficient| X["Withhold output with a reason"]

stateDiagram-v2
    [*] --> Waiting
    Waiting --> Ready: enough valid causal observations
    Waiting --> Rejected: malformed or unsupported input
    Ready --> Calculated: selected formula applied
    Calculated --> Interpreted: diagnostic and limitation retained
    Interpreted --> Ready: next observation arrives
    Rejected --> Waiting: corrected input and deterministic reset

How it works#

This page states the contract — how to call it correctly. The article explains the concept: why it works, and where it breaks.

Read the article →

References#

• TA-Lib pattern-recognition catalog — see linked primary or authoritative record
• CME Group candlestick chart lesson — see linked primary or authoritative record
• Japanese Candlestick Charting Techniques — see linked primary or authoritative record
• Evidence decision
• Level 1 evidence map

The rest of the Multi-Candle Patterns family#

• Morning StarEvaluates exactly three candles against explicit morning-star gap, penetration, scale, and downtrend conventions.
• Evening StarEvaluates exactly three candles against explicit evening-star gap, penetration, scale, and uptrend conventions.
• Three White SoldiersEvaluates exactly three candles against explicit white-soldiers body, close, shadow, scale, and downtrend conventions.
• Three Black CrowsEvaluates exactly three candles against explicit black-crows body, close, shadow, scale, and uptrend conventions.
• Three Inside Up/DownEvaluates exactly three candles against explicit inside-pair containment, confirmation, scale, and trend-context conventions.
• Three Outside Up/DownEvaluates exactly three candles against explicit outside-pair engulfing, confirmation, scale, and trend-context conventions.
• Abandoned BabyEvaluates exactly three candles against explicit abandoned-baby isolation, doji, penetration, scale, and context conventions.
• Morning Doji StarScans three-bar windows for a down candle, then a doji, then an up candle that closes above the midpoint of the first candle's …
• Evening Doji StarScans three-bar windows for an up candle, then a doji, then a down candle that closes below the midpoint of the first candle's …
• Three-Line StrikeScans four-bar windows for three same-colour candles followed by one opposite candle whose body swallows the run from the first…
• Upside Gap Two CrowsScans three-bar windows for an up candle, a gapped-up down candle, and a second down candle that opens higher still yet closes …
• Mat HoldScans five-bar windows for an up candle, a gap above its close, three bars that hold above the first candle's body floor, and a…