The Three Inside Down is the bearish mirror of Three Inside Up. It starts with a large bullish candle, followed by a small bearish Harami inside it, then confirmed by a third bearish candle that closes below the first candle’s open. It resolves the Bearish Harami’s ambiguity in a complete 3-candle sequence.

How to Identify

• Appears at the top of an uptrend
• Candle 1: large bullish green candle
• Candle 2: small bearish candle contained within candle 1’s body (Bearish Harami)
• Candle 3: bearish candle closing below candle 1’s open — or ideally below its low
• Each candle closes progressively lower
• Volume should ideally increase on candle 3

Market Psychology

A strong uptrend candle is followed by a stall (candle 2 shows bulls losing momentum). Candle 3 then delivers decisive bearish confirmation, closing below the entire range of candle 1. Bulls pushed price up strongly on candle 1, stalled on candle 2, and then bears completely overtook the entire prior bullish range on candle 3. The 3-candle sequence is a complete, self-contained reversal story.