Three Inside Candlestick Reversal Patterns and Single-Position Rules

Summary

This document describes a simple trading program that acts on the Three Inside candlestick pattern. The bullish setup begins with a long bearish candle, followed by a smaller bullish candle contained within the first candle’s range; the third candle is bullish and closes above the first candle’s high. The bearish version reverses these directions, with the third candle closing below the first candle’s low.

The program is described as opening at most one long or one short position. The document does not specify how candle length or smallness is measured, when an order is placed relative to the confirming candle, or what exit and risk controls are used. It provides no backtest, market selection, timeframe guidance, or evidence that either pattern is profitable, so the pattern definitions alone are not a complete trading system.

Key ideas

• The bullish pattern uses a bearish candle, an inside bullish candle, and a bullish breakout close.
• The bearish pattern reverses the candle directions and closes below the first candle’s low.
• The described program limits itself to one long or one short position.
• The document does not define exits, sizing, or risk controls.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.