Three Inside Up and Down
The Three Inside Up candlestick formation is a trend-reversal pattern that is found at the bottom of a downtrend.
For a valid three inside up candlestick formation, look for these properties:
- The first candle should be found at the bottom of a downtrend and is characterized by a long bearish candlestick.
- The second candle should at least make it up all the way up to the midpoint of the first candle.
- The third candlestick needs to close above the first candle’s high to confirm that buyers have overpowered the strength of the downtrend.
It means that the uptrend is possibly over and that a new downtrend has started.
The first candle should be found at the top of an uptrend and is characterized by a long bullish candlestick.
The second candle should make it up all the way down the midpoint of the first candle.
The third candlestick needs to close below the first candle’s low to confirm that sellers have overpowered the strength of the uptrend.
