Three Outside Up

Not to be confused with the 3-inside up pattern, the 3 outside-up candlestick pattern is simply a confirmation of the bullish engulfing pattern.

With this said, the first candles in this bullish pattern are the exact same as a regular bullish engulfing pattern.

The third candle must be another full body bullish candle that closes higher than the close of the previous bullish candle.

The 3 outside-up pattern occurs at the bottom of established downtrends.

The formation of the bullish engulfing causes skepticism among sellers, and then this skepticism is met with fear as the engulfing pattern is followed by a strong bullish candle that confirms the end of the current trend.

Because this is basically a confirmation pattern, it comes with a moderately high success rate, with a 75% accuracy according to Bulkowski.

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