loading...
A bullish reversal pattern that starts with a harami and adds confirmation. The third candle proves what the second candle suggested.
The Three Inside Up is a bullish reversal pattern consisting of three candles. It begins with a large bearish candle, followed by a smaller bullish candle that forms within the body of the first (a Bullish Harami), and concludes with a third bullish candle that closes above the first candle's open.
This pattern essentially combines a Bullish Harami with a confirmation candle. The third candle validates the reversal signal suggested by the harami, providing a higher-probability entry than the harami alone.
The story of the Three Inside Up is one of confirmed reversal. The first candle shows strong selling pressure, with bears firmly in control and driving price lower.
But on the second day, something changes. The candle opens within the prior body and closes higher — still within the first candle's range, but the failure to continue lower signals that selling pressure is exhausting. This is the harami, the 'pregnant' pattern, carrying within it the seed of reversal.
The third candle is the verdict. Buyers push price above the first candle's open on increasing volume, confirming that the balance of power has shifted. The bears had their chance and couldn't follow through. Three candles tell a complete story: dominance, hesitation, reversal.
Conservative: Enter long on a break above Day 3's high.
Aggressive: Enter long at the close of Day 3.
Below the low of the first (bearish) candle. The mother candle's low is the invalidation — if price breaks it, the bullish reversal has failed.
T1: Previous swing high or resistance. T2: Measured move equal to the first candle's body projected upward. The three-candle confirmation adds reliability over a basic harami.
Minimum 1:2. The built-in confirmation candle makes this more reliable than a standalone bullish harami.
The Three Inside Up is a bullish reversal pattern that essentially combines a Bullish Harami with a confirmation candle. Its reliability comes from the three-candle confirmation structure, but like all reversal patterns, it needs proper trending context to be meaningful.
This is a harami with confirmation. The third candle's close above the first candle's open seals the bullish reversal. Wait for Day 3 — the harami alone is only a suggestion.
Go deeper with the Academy lesson. Learn advanced setups, volume confirmation, and real trade examples.
Join Academy →