Understanding the Three Inside Up Candlestick Pattern
- 19th November 2025
- 12:00 AM
- 6 min read
A three inside up candlestick pattern is a trend reversal pattern that provides a clear sign that buying strength is returning in the market. After a long fall in prices, traders often wait for an upward price movement. This pattern is accurate at an average rate of 65%, but this depends on a lot of technical factors.
If you are still confused about understanding this pattern, read this blog to understand the three inside up candlestick pattern meaning, significance, benefits, and limitations.
What is a 3 Inside Up Candle Pattern?
A three inside up candlestick pattern denotes a bearish-to-bullish trend reversal in the market. This pattern indicates that an upward price movement will return soon after a downtrend has lost its momentum in the market. It consists of three candlesticks and is considered complete when these three candlesticks form in a specific pattern.
You can see a triple candlestick pattern at the end of a downtrend, and it will start with a larger body bearish candlestick.
Significance of a 3 Inside Up Candle Pattern
A three inside up candlestick pattern is important since it indicates a lot regarding market movement. Sellers may become alert with this pattern since it indicates that the price is changing its direction.
If you do not want to trade with this pattern, you can take a long position before the day ends on the third candle. However, this three-inside-up candle pattern is not always reliable.
Since it is a short-term pattern, you must remember that it will predict a small- to medium-scale move in a new direction.
How Do the 3 Inside Up and Down Candlestick Patterns Work?
Both 3 inside up and 3 inside down candlestick patterns are effective trading tools that help in identifying trend reversals, but with different trader psychology. The three inside up candlestick pattern indicates the transition from bearish sentiment to a bullish one.
The first candle of this pattern gives a sign of sellers’ control, while the other two candles show a huge buying pressure. Traders take a long position and predict the trend reversal using this pattern.
On the other hand, a three inside down candle pattern shows a market sentiment transitioning from bullish to bearish. The first candle of the inside down pattern mirrors the buyers’ dominance.
Furthermore, the other two bearish candles indicate the heightened selling pressure. Unlike the three inside up pattern, traders consider entering short positions after seeing this pattern.
Benefits and Limitations of the Three Inside Up Candlestick Pattern
The table below demonstrates the benefits and limitations of a three inside up candlestick pattern:
| Benefits | Limitations |
| Its uniqueness helps traders to spot it easily on a chart. | This pattern confirms a potential price reversal after it has already begun. This means you might miss entering at the absolute lowest price point. |
| You can use this pattern on different chart timeframes, including hourly charts and daily or weekly charts. | The reliability of the three inside up patterns can decrease if the previous downtrend forms in very volatile market conditions. |
| This pattern provides clear points where you can set stop-loss orders to manage your risks. | In highly volatile markets or sideways movement, the pattern can form without any meaningful reversal. This can indicate triggering premature entries. |
| When formed properly at the end of a downtrend, a 3-inside-up candlestick pattern shows a clear transition from selling power to buying power. It is effective when supported by key support levels. | You cannot solely rely on this pattern to make trading decisions. To ensure reliability, you must validate with other technical indicators, volume analysis, and market context. |
Trading Strategies Using a 3 Inside Up Pattern
The inside three inside up candlestick pattern indicates a bullish trend reversal from bearish ones. Below are some of the best strategies to use this candlestick pattern:
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Entry Signal
Some traders may see the close of the third candle above the high of the second candle as a sign to enter a long position. They estimate that the new uptrend will continue.
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Confirmation
You must look for additional confirmation, rather than solely relying on this pattern. Seek whether the trading volume picked up on the third candle or not. This indicates a strong buyer participation. In addition, look at the other technical tools, such as the relative strength index (RSI) and moving averages.
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Stop-Loss
A three inside up pattern may also allow you to place stop-loss orders to manage your risks. You need to place this stop-loss order below the lowest point of this pattern. If the price falls to that extent, it indicates the pattern has failed. In this situation, the stop-loss order automatically closes the trade to save from potential losses.
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Understanding the Context
This pattern is more reliable if it takes shape after a clear downtrend. If the price moves without a sustained trend, the pattern may be less significant.
Final Thought
A three inside up candlestick pattern can help you identify potential price reversals at the end of a downtrend. The three-candle structure of this pattern indicates that selling pressure is weakening and the buying pressure is gaining strength. However, you must also use other technical indicators, like RSI and moving averages, rather than solely relying on them.
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Frequently Asked Questions on 3 inside up candle pattern
1. Is a 3 inside up candle pattern bullish or bearish?
A 3 inside up candle pattern is an indication of potential trend reversal from bearish to bullish. This pattern forms after a downtrend and indicates that selling pressure is losing control and the buyers are gaining control.
2. How reliable is the 3 inside up candlestick pattern?
The accuracy rate of a three inside up candlestick pattern is 65% but the accuracy of each candlestick pattern varies. This depends on different factors like market context, time frame, and other factors.
3. What is the difference between a 3 inside up and a 3 inside down candle pattern?
The primary difference between the 3 inside up and down candle patterns lies in their indication. A 3 inside up pattern indicates the transition from bearish sentiment to a bullish one, and a 3 inside down pattern shows the transition of bullish market sentiment to a bearish one.
4. How do you trade with a 3 inside up candlestick pattern?
For trading with a three inside up candlestick pattern, you must wait for confirmation, evaluate the market context, and place buy orders in bulk.
