Three+ Candle Patterns (Part 2)

When analyzing price action, Three+ Candle Patterns offer high-value insights into market reversals and trend confirmations. These patterns, formed over three or more candles, provide deeper validation than single or double-candle setups and help traders spot major turning points.

Let’s explore some of the most effective bullish and bearish three-candle patterns.

🔼 Bullish Patterns

1. Three Line Strike (Bullish)

This pattern consists of:

• Three consecutive bearish candles (lower closes each time)

• A fourth large bullish candle that engulfs all three previous candles

💥 Signal: Strong bullish reversal despite continued selling pressure. Often marks the end of a downtrend.

2. Three Inside Up

This is a bullish reversal formed after a downtrend:

• Candle 1: Long bearish candle

• Candle 2: Smaller bullish candle that closes within Candle 1

• Candle 3: Bullish candle closing above Candle 1

✅ Meaning: Buyer strength is growing from within the downtrend, leading to potential upward momentum.

3. Three Outside Up

Another bullish reversal signal:

• Candle 1: Bearish candle

• Candle 2: Large bullish candle that engulfs the first one

• Candle 3: Another bullish candle that confirms the uptrend

🧠 Insight: A strong shift in market sentiment, where bulls completely overtake bearish momentum.

🔽 Bearish Patterns

1. Three Line Strike (Bearish)

The bearish version includes:

• Three bullish candles (each with higher closes)

• A fourth large bearish candle that engulfs all three previous candles

📉 Warning: Despite a strong uptrend, sellers aggressively take over. It’s a classic trap pattern that reverses momentum fast.

2. Three Inside Down

Bearish reversal after an uptrend:

• Candle 1: Long bullish candle

• Candle 2: Small bearish candle within Candle 1

• Candle 3: Bearish candle closing below Candle 1

⚠️ Interpretation: Signals weakening bullish strength and the start of a downtrend.

3. Three Outside Down

Stronger than the Inside Down:

• Candle 1: Bullish candle

• Candle 2: Bearish candle that engulfs the first

• Candle 3: Another bearish candle confirming the trend reversal

💣 Key Feature: A full takeover by bears. Reliable confirmation of downside pressure.

Three+ candle patterns are ideal for traders seeking more confirmation before entering a trade. When combined with volume analysis, support/resistance zones, and risk management — these patterns can be powerful tools in your trading toolkit.

📚 Keep sharpening your edge with VOOI Academy. Master the structure, spot the signals, and trade with confidence.