Three Inside Up

Name Type Prerequisite Use Cases
Three Inside Up Bullish Reversal OHLC Data Confirmed reversal signal.

Definition

This is essentially a Bullish Harami followed by a confirmation candle.

Pattern Structure

  1. Candle 1: Long red candle.
  2. Candle 2: Small green candle inside Candle 1 (Harami).
  3. Candle 3: Green candle closing above Candle 2's close (Confirmation).

Visualization

Three Inside Up

Story

The market is suffering a heavy downtrend, marked by a massive red candle. But the next day, the selling simply vanishes, resulting in a small 'harami' candle contained within the previous panic. The bears have exhausted themselves. On the third day, the bulls capitalize on this hesitation, launching a powerful green candle that breaks above the trading range. It's a textbook three-act play of panic, pause, and decisive bullish reversal.

Trading Significance

  1. Confirmation: The third candle provides the confirmation that the Harami reversal is valid.
  2. Higher Confidence: More reliable than a simple Harami.