Bullish Three Outside Up Candlestick

Bullish three outside up is a highly reliable candlestick bullish reversal pattern which indicate the end of an existing downtrend and the beginning of new uptrend. It is a three candlestick formation, which is regarded as the confirmation of bullish engulfing pattern, because the first two candlesticks forms the bullish engulfing pattern, and the third candlestick confirms the trend change.


Requirements of bullish three outside up candlestick pattern include,

• The pattern should form at the bottom of an established downtrend.
• The first candlestick is a bearish (black or colored) candlestick.
• On second-day, there should be a long bullish (white or colorless) candlestick closing above the first candlestick, the real-body of which totally engulf the real-body of first day candlestick. Thus forming the bullish engulfing pattern.
• The third day is also a bullish day closing higher than second day.

Bullish three outside up formation occurs when bulls take control of the market after a significant downtrend. Two consecutive bullish days with higher closes than first-day candlestick is a clear indication of a bullish trend.

Bullish three outside up candlestick is a highly reliable, reliable than bullish engulfing pattern. The reliability increases with increase in trading volume and real-bodies of second and third day candlesticks. As three outside up is a confirmation of other pattern, most traders don't look for other confirmations. The suggested confirmations are higher close, a gap up or bullish candlestick on day four.

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