What the three inside pattern is
The three inside up and down pattern is a harami followed by a confirmation candle. A harami is a small candle whose body sits inside the body of the large candle before it. It is covered on the Bullish Harami and Bearish Harami pages. The three inside version waits for one more candle that closes beyond the large candle's body.
- Three inside up appears after a decline and points to a possible bullish reversal.
- Three inside down appears after a rise and points to a possible bearish reversal.
In the text below, the candles are called A (the large candle), B (the small inside candle) and C (the confirmation candle).
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Formation rules
| Rule | Three inside up | Three inside down |
|---|---|---|
| Prior move | Clear decline | Clear rise |
| Candle A | Long bearish body | Long bullish body |
| Candle B | Bullish body fully inside A's body | Bearish body fully inside A's body |
| Candle C | Bullish, closes above A's open | Bearish, closes below A's open |
Some traders accept a B candle whose close is only near A's midpoint. Stricter versions want B to close past the midpoint. The wicks of B can extend past A's body. The body is what counts.
Drawn example charts
These are drawings, not live prices. # marks a bearish body and o marks a bullish body.
What it says about buyers and sellers
In three inside up, candle A shows sellers in control. Candle B shows the selling stopped and buyers held price inside A's range. Candle C shows buyers pushing price past the level where sellers started A. Three inside down reads the same way with the roles reversed.
The pattern describes a change in short-term pressure. It does not show who will control the next move.
Where it matters
- Trend: the pattern only has meaning after a visible move. In a sideways range, the same shapes appear constantly and carry little information.
- Level: traders give it more weight at support, resistance, a prior swing high or low, or a round-number area. See Technical analysis.
- Timeframe: on very short timeframes, the pattern forms often and is mostly noise. Daily and higher charts produce fewer patterns. Each one represents more trading.
Why it fails in isolation
- Candle C can be the high (or low) of a short pullback, after which the original trend resumes.
- News releases can produce the shape in a single burst that reverses just as fast.
- On thin markets or gaps, candle bodies can be distorted.
- The confirmation comes late. By the close of C, much of the move may already have happened. This leaves a wide distance to a logical stop level.
How traders look for confirmation
- A close beyond candle C's high (for up) or low (for down) on a later candle.
- Agreement with a level, a trendline or a broken structure.
- Indicator context such as momentum turning, used as a filter rather than a trigger.
- A defined invalidation point, often beyond candle A's extreme, sized according to risk management rules.
Leveraged forex and CFD trading can lose money fast. A pattern does not change that. Practising recognition on historical charts or a demo account costs nothing.
Related patterns: Three Outside Up/Down, Harami Cross, Inside Bar, and the full list on Candlestick Patterns.
Frequent questions
What is the difference between three inside up and a bullish harami?
A bullish harami is the A and B candles only. Three inside up adds candle C, which must close above A's open.
Is three inside down the same as three outside down?
No. In "inside", B sits within A's body. In "outside", B's body engulfs A's body.
Does the pattern work on any timeframe?
It forms on any timeframe. On short ones it is less reliable because of noise.
Can I trade the pattern on its own?
Many traders do not, because it fails often without trend and level context. It describes past price action and does not predict the next move.