Falling Three Methods
The Falling Three Methods (FTM) is a technical analysis tool used to identify potential reversals in the price of a security. It is based on the idea that a security’s price will often move in three distinct phases: an uptrend, a downtrend, and a consolidation period. The FTM is used to identify when a security is transitioning from one phase to another, and can be used to identify potential buying or selling opportunities.
History of the Falling Three Methods
The Falling Three Methods was developed by Japanese analyst Goichi Hosoda in the late 1960s. Hosoda was a pioneer in the field of technical analysis, and his work on the FTM was part of a larger effort to develop a comprehensive system of technical analysis. The FTM is based on the idea that a security’s price will often move in three distinct phases: an uptrend, a downtrend, and a consolidation period. By identifying when a security is transitioning from one phase to another, the FTM can be used to identify potential buying or selling opportunities.
Comparison Table
| Uptrend | Downtrend | Consolidation |
|---|---|---|
| Price increases | Price decreases | Price remains flat |
| Buy signals | Sell signals | Neutral signals |
Summary
The Falling Three Methods (FTM) is a technical analysis tool used to identify potential reversals in the price of a security. It is based on the idea that a security’s price will often move in three distinct phases: an uptrend, a downtrend, and a consolidation period. By identifying when a security is transitioning from one phase to another, the FTM can be used to identify potential buying or selling opportunities. For more information on the Falling Three Methods, readers can visit Investopedia, Investing.com, and other financial websites.
See Also
- Moving Average Convergence Divergence (MACD)
- Relative Strength Index (RSI)
- Bollinger Bands
- Stochastic Oscillator
- On Balance Volume (OBV)
- Average Directional Index (ADX)
- Price Channel
- Parabolic SAR
- Fibonacci Retracement
- Price Volume Trend (PVT)
