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Definition

 

Bearish Three Inside Down is also called Confirmed Bearish Harami formation. The third day can confirm the trend reversal.

  • Trend: Reversal
  • Expected trend: Bearish
  • Previous trend: Bullish
  • Reliability: Moderate
  • Type: Bearish
  • Number: 3

Recognition

  • The market is in an upward trend.
  • The first two days make up a Bearish Harami formation.
  • The third day is a black candle with its closing price below the closing price of the candle on the previous day.

Interpretation

The first two candles of the formation are a Bearish Harami. The third day confirms the reversal of the Bearish Harami, if the black candle closes at a new minimum.

Important factors

The formation is highly reliable, but requires a confirmation. The confirmation could come from a black candle with a downward gap or a lower closing price.