Three Inside Up

Three Inside Up is a three-candle bullish reversal pattern that forms at the bottom of a downtrend. It begins with a large bearish (red) candle confirming the existing downtrend. The second candle is a smaller bullish candle whose body is contained entirely within the first candle's range — a Bullish Harami. The third candle is a bullish candle that closes above the high of the first candle, confirming that buyers have decisively taken control. The Three Inside Up is considered a reliable reversal signal because it captures a structured transition from seller dominance, through indecision, to confirmed buyer control across three consecutive sessions. It is most meaningful when it forms at a major support level or after an extended decline in an equity or index chart.