******** Candlestick Reversal Pattern Probability High ***********

Bearish Reversal Pattern
Three Inside Down occurs when a Bearish Harami Pattern is confirmed with another red candlestick.

 

Characteristics
After an upward trend three large red candlesticks appear showing strong selling sentiment.

 

Buyers enthusiasm ends at a certain point and sellers begin to enter. Volume is less and price change in the bids and offers is smaller. When the first red candlestick appears within the body of the previous candlestick those who are holding Long positions should show some concern and be on their toes ready to cover their position with further confirmation.

Characteristics

After an upward trend has been established a red candlestick occurs within the body of the green candlestick.

 

Another red candlestick comes in.

Confirmation
In this case confirmation has already occurred. If the second candlestick forms at or below the half way point of the previous red candlestick the signal is stronger.

 

If the second red candlestick closes below the open of the last green candlestick this is even greater possibility of the trend reversal.

1. This is a definite end to an upward trend. If you are long you should already have gotten out because clearly the feelings of buyers have changed and sellers are now greater.

 

2. Something very psychological has happened at this level. It is either a whole number with tremendous strength or has shown enormous resistance at that level to create such a change in sentiment.