3-candle pattern · bearish bias
Three Outside Down candlestick pattern
Three outside down is a bearish engulfing pattern followed by a third candle that closes lower still, confirming the shift towards sellers.
How to identify it
- A prior advance.
- A bearish engulfing pattern.
- A third candle closing below the engulfing candle's close.
Where it matters: Appears after an advance, near a high.
What it means
A reversal with follow-through.
What confirms it
The third candle's lower close.
What invalidates it
A close above the high of the engulfing pattern.
Common mistakes
- Ignoring nearby support that the third candle runs straight into.
Frequently asked questions
Is three outside down bearish?
Yes. It is a confirmed bearish engulfing.
What invalidates it?
A close above the high of the engulfing pattern.
Related candlestick patterns
Educational content only, not financial advice. Chart patterns describe probabilities, not certainties, and every pattern can fail. See our disclaimer.