The pattern which is called the three inside pattern consists of three subsequent candles. The information they carry is that the current momentum of the trend is weakening and you may expect the price to go in the opposite direction.
The three inside down pattern
This type of the three inside candlesticks pattern may be observed at the top of the uptrend. The first candle that forms the three inside down pattern is a long bullish one. The second one is submerged by the leading candle and is small and bearish. The last, third candle is also bearish but its closing is situated beneath the second candles closing and the first candles opening.
The three inside up pattern
At the bottom of the downtrend, you may search for the three inside up pattern. This time, the first candle is large and bearish. The next candle is a small bullish one completely absorbed by the first candle in the formation. The last, bullish candle closes above the second candles closing and the first candles opening.
