Bearish Three Inside Down
The Bearish three inside down pattern is a bearish reversal indicator. This pattern consists of three different days.
The first day is a large up day. The second day the stock drops down as is unable to bring itself back up. In fact this day should close down a little. The first two days form a pattern by itself called the Bearish Harami pattern.
The third day the pattern breaks down lower and closes below the second day. This gives off a bearish signal.
Why does the Bearish three inside pattern work? Basically this pattern is just confirmation for another pattern the Harami. The last day confirms the pattern by going lower.
Tip because this is just a confirmation of another pattern, aggressive traders may want to enter before the third day arrives. Conservative traders would want to wait for it to be confirmed.
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