Unique Three River
The unique three river is a candlestick chart pattern that predicts a bullish reversal, although there is some evidence that it could act as a bearish continuation pattern. The unique three river pattern is composed of three price candles. If the price moves higher after the pattern, then it is considered a bullish reversal. If the price moves lower after the pattern, then it is a bearish continuation pattern.
Definition: The Three Rivers Pattern is a candlestick chart pattern used to predict bullish reversals. The pattern consists of three price candles. If the price rises after the pattern, it is considered a bullish reversal. If the price falls after the pattern, it is considered a bearish continuation pattern.
Origin: The concept of the Three Rivers Pattern originates from Japanese candlestick charting techniques, invented by Japanese rice trader Munehisa Homma in the 18th century. This technique was later introduced to the West and widely used in technical analysis.
Categories and Characteristics: The Three Rivers Pattern mainly has two types: Bullish Three Rivers and Bearish Three Rivers. The Bullish Three Rivers usually appears at the end of a downtrend, indicating a potential upward reversal. The Bearish Three Rivers appears at the end of an uptrend, indicating a potential downward reversal. The pattern is characterized by three consecutive candles: the first is a long bearish candle, the second is a small bullish or bearish candle, and the third is a long bullish candle.
Specific Cases: Case 1: In the daily candlestick chart of a stock, three consecutive candles appear: the first is a long bearish candle, the second is a small bullish candle, and the third is a long bullish candle. Subsequently, the stock price starts to rise, confirming the bullish Three Rivers prediction. Case 2: In the hourly candlestick chart of a currency pair, three consecutive candles appear: the first is a long bullish candle, the second is a small bearish candle, and the third is a long bearish candle. Subsequently, the currency pair price starts to fall, confirming the bearish Three Rivers prediction.
Common Questions: 1. Is the Three Rivers Pattern always accurate? Answer: The Three Rivers Pattern is not always accurate; it is just a technical analysis tool. Investors should use it in conjunction with other analysis methods. 2. How can the accuracy of the Three Rivers Pattern be improved? Answer: The accuracy can be improved by combining it with other technical indicators such as volume, support, and resistance levels.
