Three Inside Down candlestick pattern
A bearish harami confirmed by a third candle that closes below the first candle's open.
Illustrative shape. Real patterns vary in proportion.
How to identify a Three Inside Down
- Appears after a rally
- Candle 1: large bullish body
- Candle 2: small bearish body inside candle 1 (a bearish harami)
- Candle 3: bearish, closing below candle 1's open
What the Three Inside Down tells you
The harami shows buying stalled; the third candle shows sellers then erased the entire first up-day.
How traders use it
Traders often enter on candle 3's close with a stop above the pattern's high.
Before taking any pattern-based trade, decide your stop first and size the position from it with the position size calculator.
Think you'd spot it on a chart?
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Frequently asked questions
Is the Three Inside Down bullish or bearish? +
The Three Inside Down is a bearish reversal pattern. A bearish harami confirmed by a third candle that closes below the first candle's open.
How reliable is the Three Inside Down? +
No candlestick pattern works every time. Patterns are more reliable when they form at a meaningful level (support, resistance, a moving average), after a clear trend, on higher volume, and when the next candle confirms them.
Do I need confirmation to trade the Three Inside Down? +
Most traders want it. Waiting for the next candle to move in the expected direction filters out many false signals, at the cost of a slightly worse entry price.
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