Three Outside Down Pattern: A Bearish Reversal Signal

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What is the Three Outside Down Pattern?

The Three Outside Down is a three-candle bearish reversal pattern that appears after an uptrend, signalling a potential shift from buying momentum to selling pressure

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First Candle - Bullish Momentum

A bullish candle forms during an uptrend, reflecting strong buying pressure in the market

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Second Candle - Bearish Engulfing Move

A strong bearish candle follows and completely engulfs the body of the first candle, indicating that sellers are gaining control

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Third Candle - Downtrend Confirmation

A third bearish candle closes lower than the previous candle, confirming the potential reversal toward a downward trend

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Confirmation & Volume

Traders usually look for continued price decline after the pattern. Higher trading volume during the second and third candles strengthens the bearish signal

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Three Outside Down Pattern: A Bearish Reversal Signal

What is the Three Outside Down Pattern? The Three Outside Down is a three-candle bearish reversal pattern that appears after an uptrend, signalling a potential shift from buying momentum to selling pressure

First Candle - Bullish MomentumA bullish candle forms during an uptrend, reflecting strong buying pressure in the market

Second Candle - Bearish Engulfing Move A strong bearish candle follows and completely engulfs the body of the first candle, indicating that sellers are gaining control

Third Candle - Downtrend ConfirmationA third bearish candle closes lower than the previous candle, confirming the potential reversal toward a downward trend

Confirmation & VolumeTraders usually look for continued price decline after the pattern. Higher trading volume during the second and third candles strengthens the bearish signal