Three Outside Up: a bullish engulfing (two candles) followed by a third confirming bullish candle that closes higher. In essence it is a bullish engulfing with built-in confirmation, which makes it more reliable than a standalone engulfing.
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PATTERN ID
SignalBullish ▲
Reliability★★★★☆
Win Rate67%
Expected move+4–9%
TimeframeDaily / weekly
Confirmationcandle 3 confirms
The short answer
What is a Three Outside Up candle?
Three Outside Up (Three Outside Up): a bullish engulfing (two candles) followed by a third confirming bullish candle that closes higher. In essence it is a bullish engulfing with built-in confirmation, which makes it more reliable than a standalone engulfing.
How do you spot a Three Outside Up candle?
First candle: small bearish candle inside a downtrend. Second candle: large bullish candle that fully engulfs the body of the first. Third candle: bullish, closing above the close of the second.
Is the Three Outside Up candle a bullish or bearish signal?
A bullish reversal pattern made of 3 candles. Confirmation: candle 3 confirms. Reference success rate 67%. You can spot it yourself on live daily candles for any symbol in the members' technical terminal. Open the technical terminal →
Pattern illustration
Bullish engulfing + a third candle confirming with a higher close
How to identify the pattern
Step-by-step checks
First candle: small bearish candle inside a downtrend
Second candle: large bullish candle that fully engulfs the body of the first
Third candle: bullish, closing above the close of the second
Volume rises across the second and third candles
Trading psychology
The power struggle between buyers and sellers
The second candle turns the tide by engulfing the whole selling session, and the third confirms buyer control with a higher close. Confirmation across three sessions makes the reversal sturdier than a two-candle pattern alone.
Outlook and confirmation
Entry conditions and expected price move
Confirmation is built in: the confirming candle is part of the pattern
Reliable bullish reversal ~67%. A gain of +4–9% over 6–12 days is typical. The stop-loss sits below the low of the second candle.
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