CDL3INSIDE (CDL3INSIDE)

CDL3INSIDE (Three Inside Up/Down) is a three-candle reversal confirmation pattern. For Three Inside Up (bullish): First candle is a long bearish candle. Second candle is a bullish harami - a smaller bullish candle completely contained within the first candle's body, opening and closing within it. Third candle confirms the reversal by closing above the first candle's open. For Three Inside Down (bearish): First candle is bullish, second is a bearish harami inside it, third confirms by closing below the first candle's open. The pattern essentially combines a harami pattern with a confirmation candle, making it more reliable than the two-candle harami alone.

Crypto traders value Three Inside Up/Down for its strong confirmation nature - it's more reliable than the simpler harami because the third candle validates the reversal. Trade Three Inside Up by entering long positions when the third candle closes above the first candle's open, preferably with volume confirming the move. For Three Inside Down, short when the third candle closes below the first candle's open. The pattern works particularly well at established support/resistance levels and after extended trends showing exhaustion. Combine with oscillators: For Three Inside Up, look for RSI rising from oversold (<30) and MACD bullish crossover. For Three Inside Down, confirm with RSI falling from overbought (>70). The three-candle confirmation makes this pattern suitable for moderate to conservative traders who prefer validated signals over early entry.