Three Inside Down Candlestick Pattern

The Three Inside Down is a three-candle bearish reversal pattern that signals the end of an uptrend and the beginning of a downward move — the mirror image of the Three Inside Up. The pattern consists of: a large bullish candle (first candle, confirming the prior uptrend), followed by a smaller bearish candle whose body is entirely contained within the range of the first candle (forming a bearish Harami), and completed by a third bearish candle that closes below the low of the first bullish candle — confirming the reversal. The progressive shift from buyers to sellers across three sessions — culminating in the third candle's close below the first candle's low — provides strong evidence of a trend change. In Indian equity markets, the Three Inside Down is most significant when it appears after a sustained rally, near a key resistance level, at a 52-week high, or after an earnings-driven gap-up that fails to sustain. Traders use the low of the third bearish candle as a short-entry trigger with a stop-loss above the high of the first bullish candle, targeting the next significant support level.