What it looks like
Candle one is a long down candle after a fall. Candle two is a small candle whose body sits inside candle one's body (the bullish harami). Candle three is an up candle that closes above candle one, confirming the harami. The pattern's low is the lowest point of the three, usually candle one or two.
What it means
The harami showed the selling stalling. The third candle shows buyers taking back the whole first candle. Sellers had been in control and this is where they were stopped. It is a sign the fall is tiring, not proof that it has turned.
How to trade it
- 1
Look for it after a fall, ideally at a floor or a level that already mattered.
- 2
Wait for the next candle to close above the pattern's high, then buy.
- 3
Example: on the gold 15 minute chart three inside up spans 13 points; the buy is the next close above its high.
- 4
Stop just below the pattern's low, about 13 to 14 points in that example.
- 5
Target the nearest swing high or 2 times the stop.
A close below the pattern's low.
Where it works best
After a clear fall into a floor, on 15 minute and higher charts.
WickSpeak finds three inside up automatically on any chart and names it on the candles that made it. Next to the name it writes what the pattern is, how to trade it and what proves it wrong, in plain English. In Playbook you can use three inside up, or any of the 146 patterns, as a condition alongside up to 12 conditions on any of 12 timeframes, then backtest it on past candles with your own costs.
Common mistakes
- Treating the harami alone as the signal.
- Accepting a third candle that does not close above the first candle.
- Trading it mid range with no fall behind it.
Related patterns
Questions traders ask
Is three inside up bullish?
Yes. It is a bullish harami confirmed by a third candle that closes above the first. It shows the fall tiring, not proof it has turned.
What is the difference between three inside up and three outside up?
Three inside up starts with a harami, a small candle inside a big one. Three outside up starts with a bullish engulfing, a big up candle swallowing a smaller down one.
Where is the stop on three inside up?
Just below the pattern's low. A close below it proves the pattern wrong.
Do I still need confirmation after three inside up?
On WickSpeak, yes: wait for the next candle to close above the pattern's high before buying.