Three Outside Down
Three Outside Down is a technical analysis pattern used to identify a potential reversal in the trend of a security. It is a bearish pattern that is formed when three consecutive candlesticks close lower than the previous day’s close. The first candlestick is typically a long white candlestick, followed by a smaller black candlestick, and then a third black candlestick that closes below the low of the first candlestick. This pattern is considered to be a strong indication that the security is likely to continue to move lower in the near future.
History of Three Outside Down
The Three Outside Down pattern was first described by Japanese candlestick charting pioneer, Homma Munehisa, in the 18th century. He used the pattern to identify potential reversals in the price of rice futures. The pattern is still used today by technical analysts to identify potential reversals in the price of stocks, commodities, and other securities.
Comparison Table
| Pattern | Description |
|---|---|
| Three Outside Down | Three consecutive candlesticks close lower than the previous day’s close. |
Summary
The Three Outside Down pattern is a bearish technical analysis pattern that is used to identify potential reversals in the trend of a security. It is formed when three consecutive candlesticks close lower than the previous day’s close. This pattern is considered to be a strong indication that the security is likely to continue to move lower in the near future. For more information on this pattern, you can visit websites such as Investopedia, StockCharts, and TradingView.
See Also
- Three Inside Up
- Three Black Crows
- Three White Soldiers
- Abandoned Baby
- Bullish Engulfing
- Bearish Engulfing
- Harami
- Doji
- Gravestone Doji
- Hammer
