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Three inside up is a three-candle bullish reversal pattern that forms after a downtrend. It begins with a long bearish candle, followed by a smaller bullish candle that stays within the first candle’s body (a harami), and completes with a bullish candle that closes above the first candle’s high. It signals that selling momentum is fading and buyers are stepping in, pointing to a potential move higher once confirmed.

They are opposite reversal patterns built on the same three-candle structure. Three inside up forms after a downtrend and is bullish, ending with a candle that closes above the first candle’s high. Three inside down forms after an uptrend and is bearish, ending with a candle that closes below the first candle’s low. Both start with a large candle, then a harami inside it, then a confirming third candle in the new direction.

Three inside down is a bearish reversal pattern. It appears at the top of an uptrend and suggests price may turn lower as sellers regain control. The first candle is a strong bullish one, the second is a smaller bearish candle contained within it, and the third closes below the first candle’s low to confirm the shift. As with all patterns, it indicates probability, so traders confirm it before considering a short.

Traders often look for confirmation when the third candle closes above the first candle’s high before considering a potential long setup. A stop-loss may be placed below a relevant recent low, while potential targets can be assessed using nearby resistance levels. Since the pattern is based on a bullish harami, it may provide an early indication that selling pressure is weakening. On the WrPro platform, CFDs are leveraged products and carry a high risk of loss, so traders should consider their position size, risk tolerance, and use of appropriate risk-management measures. The pattern is not a guarantee of future price movements.

Three inside up is generally considered a moderately reliable bullish reversal signal, particularly when it appears after a clear downtrend and near a meaningful support level. Its reliability can improve when supported by stronger volume, price action confirmation, and alignment with the higher-timeframe trend. The third candle closing above the first candle’s high provides confirmation of the reversal, but the pattern can still fail, especially during strong or persistent downtrends. Treat it as a probability-based signal rather than a guarantee, and use appropriate risk management, as CFD trading carries a high risk of loss.

A harami is a two-candle pattern in which a smaller second candle forms within the body of a larger first candle, suggesting that the existing momentum may be weakening. Three inside up starts with a bullish harami but adds a third bullish candle that closes above the first candle’s high, providing confirmation of a potential bullish reversal. Because it includes this additional confirmation, three inside up is generally considered a stronger signal than a harami alone.