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Interesting candle pattern on RUT

Discussion in 'General Discussion' started by marat, Jun 2, 2015.

  1. marat

    marat Well-Known Member

    RUT is exhibiting interesting 3-in-1 candle setup. I am not a candlestick expert, but this one seemed interesting. This particular pattern has been promoted by Jeffrey Kennedy, and you can read about it more at this link http://vantagepointtrading.com/archives/3316 :
    "The 3-in-1 bar pattern occurs when the price range of the fourth bar (named, the “set-up” bar) engulfs the highs and lows of the last three bars. When prices penetrate above the high — or — below the low of the set-up bar, it often signals the resumption of the larger trend. ... "

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  2. Thanks, Marat.

    Good post, interesting article. I thought the article poorly defined the pattern: instead of "...occurs when the price range of the fourth bar (named, the "set-up" bar) engulfs the highs and lows of the last three bars", it should have read: "...occurs when the price range of the first bar (named, the "set-up" bar) engulfs the highs and lows of the following three bars."

    If the author meant that you could have a version of the pattern where there could be more than four bars total, it could read: "...occurs when the price range of a previous bar - named, the "set-up" bar - engulfs the highs and lows of the most recent 3 bars."

    As it is, the piece doesn't clarify whether this a 4 bar pattern (e.g., "Three Rising Methods" is a 5-bar pattern) or allows for more.
     
  3. uwe

    uwe Well-Known Member

    I understood it as at least 4 bars (more are also possible).
     
  4. marat

    marat Well-Known Member

    I agree that the original wording could have been better but the meaning still comes through. You have candle that defines the range of the following N bars. N=1-2 cases are fairly common, but N >=3 are rare and perhaps significant. It looks like today we may even have 4-in-1. For me all this suggests a significant indecision point and a way to spot a potential trend once RUT closes above or below the setup bar on 5/27
     

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