Three Inside Up
Three Inside Up is a bullish reversal pattern. The pattern is made up of three candlesticks of which the first candlestick is bullish and has a long real body. The second candlestick in this pattern is a small bullish candlestick that remains contained within the real body of the first candlestick. The third and final candlestick in this pattern is bearish and has a big real body that closes above the first candlestick.
The pattern is considered stronger if the third candlestick closes significantly higher than the high of the first candlestick. The third candlestick completes the pattern and indicates a possible shift in the ongoing downtrend.
Take a look at the below USD/CAD chart in which the Three Inside Up pattern has appeared at the bottom. The bears were in control for several sessions and had taken the pair considerably lower. However, near 1.2800 a Three Inside Up pattern appeared. The first candlestick in the pattern is bearish and it is followed by a small bullish candlestick. The third candlestick is also bullish but it is completely covering the first bearish candlestick. The third candlestick confirmed the bullish reversal and the pair started to move towards 1.36000.
