What is the three outside down pattern?
The three outside down is a bearish candlestick pattern. A bearish engulfing followed by a third candle closing lower to confirm the move.
How to spot a three outside down
- 1Find a bearish engulfing after an advance.
- 2Wait for the third candle.
- 3It closes lower than the engulfing candle, confirming the turn.
How does the three outside down form?
A bearish engulfing followed by a third bar closing lower still.
How do you confirm a three outside down?
Engulfing plus continuation is a stronger read than either alone, because the second bar's claim survives a full session of testing.
When does the three outside down fail?
Late in an extended decline the same three bars mark the flush rather than the start of one.
No chart pattern works every time. The examples on this page were chosen because they show the pattern clearly, and in real markets patterns fail often.
Practice on real charts
3 real examples of the three outside down, cut off where the pattern completed. Make your call, then see what happened.
The shaded area is a three outside down. Where did price go next?
Three Outside Down: common questions
Is the three outside down bullish or bearish?
The three outside down is bearish. Engulfing plus follow-through is a stronger read than either alone.
How do you spot a three outside down?
Find a bearish engulfing after an advance. Wait for the third candle. It closes lower than the engulfing candle, confirming the turn.
What is the difference between the three outside down and the three outside up?
The three outside down: A bearish engulfing followed by a third candle closing lower to confirm the move. The three outside up: A bullish engulfing followed by a third candle closing higher to confirm the move.
How reliable is the three outside down?
No chart pattern works every time. Late in an extended decline the same three bars mark the flush rather than the start of one. That is why it helps to wait for confirmation and to practice on many real examples before relying on it.
How can I practice spotting the three outside down?
Use the real charts on this page: each one stops where the three outside down completed, so you can make a call and then see what happened. The free Chartle app mixes the three outside down in with 48 other patterns in short daily sessions.
Keep learning
- Chart pattern gameGuess where price goes next on real charts, all 49 patterns mixed.
- All 49 chart patternsEvery bullish and bearish pattern, with a printable cheat sheet.
- How to read candlestick chartsBodies, wicks and colors explained from the start.
- Cheat sheet PDFAll patterns on two printable pages.
