Formation:

1. Bears dominate the first session with a long red candle.
2. Bulls push back in the second session, recovering at least half the prior loss.
3. A full bullish breakout occurs on the third candle, closing above the first session's open.

This confirms that bulls have regained control and may signal the beginning of a new uptrend.

What Is the Three Inside Down Candlestick Pattern?

The three inside down pattern is the bearish counterpart of the bullish three inside up. It appears at the top of an uptrend and includes:

• A long bullish candle
• A bearish candle that closes at least at the midpoint of the first
• Another bearish candle that closes below the first candle's open

Formation:

1. Bulls push the price higher with a strong green candle.
2. Bears begin to fight back, reclaiming at least half of the previous session’s gain.
3. The third candle confirms bearish dominance by closing below the initial bullish open.
   

Key Takeaways

• Three inside up: Bullish reversal in a downtrend.
• Three inside down: Bearish reversal in an uptrend.
• Always consider trend context before trading these patterns.
• Wait for confirmation on the third candle before entering trades.

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