Sunday, July 3, 2016

What is Three Inside Down: Bearish Reversal Pattern?

What is Three Inside Down: Bearish Reversal Pattern?

The Bearish Three Inside Down Pattern is another name for the Confirmed Bearish Harami Pattern. Its a bearish reversal pattern. In this pattern, first candle is a long white candle, which closes near its high. Second candle is a small black candle, which gaps away from the first candle and closes inside the body of the first candle, thus creating a harami pattern. Third candle exceeds the lows of the first two candles.

Strategy: Short positions can be created once the low of the third candle is broken successfully. Size of third candle often provides some indication to the strength of the reversal pattern.