Three Outside Down

The Three Outside Down candlestick pattern is a three-candle bearish reversal pattern with a reliable history of reversing at the top of uptrends.

According to Bulkowski the Three Outside Down candle pattern has a frequency rating of 21, so it can easily be found in most charts on multiple time frames.

The first candle is a small bullish candle with a small upper and lower wicks.

The second candle is a larger bearish candle that opens above the close of the first candle and then closes below the open of the first candle. This gives the appearance of the second candle completely engulfing the first.

The third and final candle is bearish candle that closes lower than the previous two candles.

Bulkowski’s testing revealed the 3 Outside Down candlestick pattern has a respectable bearish reversal accuracy of 69%.

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