4 min Read Dec 1, 2022
Three Inside Down is the bearish counterpart of Three Inside Up — a three-candle reversal pattern that forms at the top of an uptrend. The first candle is a large bullish (green) candle; the second is a smaller bearish candle contained within the first (a Bearish Harami); the third is a bearish candle that closes below the low of the first candle, confirming the reversal. This structured progression — from strong buying, through indecision, to confirmed selling — signals that bulls have lost control and bears are taking over. The Three Inside Down is a high-confidence reversal signal when it appears at a known resistance level, after an extended rally, or in the context of overbought momentum indicators. Follow-through confirmation from subsequent sessions strengthens the signal.
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