Candlestick Patterns · Bullish
Three Outside Up
A bullish engulfing pattern plus a third candle that closes higher.
The engulfing candle takes back the prior bearish body. The next candle closes above that engulfing candle.
This is an example of how traders often plan the pattern. It is not a promise that price will reach the target.
Identification
- Candles one and two form a bullish engulfing pattern.
- Candle three closes above candle two.
Market context
The extra candle is confirmation that the engulfing candle got follow-through.
Entry example
An example entry is above the third candle.
Stop-loss example
An example stop is below the engulfing candle's low.
Target example
An example target is the swing high before the decline.
Common mistakes
- Ignoring the requirement that candle two actually engulfs candle one.
Candlestick and chart patterns are probabilistic observations, not guaranteed trading signals. This page does not report a win rate.