the hAndbook of technIcAl AnAlysIsvolume. Similarly, a bullish three-bar pattern is considered potentially more reliable
if the last bar is an overextended bar that closes at or near its high on high volume.
In Figures 7.8 and 7.9, we see six basic triple bar bullish reversal patterns
occurring in a downtrend.
Four generic Multiple price Bar reversal Formations
In Figure 7.10, we see four basic multiple bar bearish reversal patterns occurring in
an uptrend. As a general rule, the larger the gaps the more bearish will be the reversal
pattern. Also, the numerous bars between the first and last bars should generally occur
on low volume, except possibly for Pattern 2 where high volume is also indicative of
Figure 7.7 Basic Triple Bar Bearish Reversal Patterns.
Figure 7.8 Basic Triple Bar Bullish Reversal Patterns.