Three Inside Up / Down

Three-bar reversal pattern. A confirmed Harami: the first two bars form a Harami (small inside body) and the third bar confirms direction by closing beyond the first bar's body. Three Inside Up = bullish; Three Inside Down = bearish.

Quick reference

Item	Value
Family	Candlestick Patterns
Input type	Candle
Output type	f64 — +1.0 Up, -1.0 Down, 0.0 otherwise
Output range	{-1.0, 0.0, +1.0}
Default parameters	none — ThreeInside::new()
Warmup period	3
Interpretation	Confirmed Harami reversal — stronger than Harami alone

Formula

Three Inside Up (+1.0):

Bar 1: long red candle
Bar 2: small green candle, body inside Bar 1's body  (Harami)
Bar 3: green candle, close > Bar 1's open            (confirmation)

Three Inside Down (-1.0): mirror — long green, small red inside, red closing below Bar 1's open. See crates/wickra-core/src/indicators/three_inside.rs.

Parameters

None.

Signed ±1 encoding

This pattern already emits the uniform candlestick sign convention shared across the family — +1.0 bullish, −1.0 bearish, 0.0 no pattern — so it drops straight into a machine-learning feature matrix where the bullish and bearish variants of the pattern occupy a single dimension.

Inputs / Outputs

Indicator<Input = Candle, Output = f64>. Python / Node: same as other three-bar candle patterns; first two bars return 0.0.

Warmup

warmup_period() == 3. Pattern emits on bar 3 of the three-bar sequence.

Edge cases

• Same as Harami + confirmation. This indicator fires only when both (a) bars 1+2 form a valid Harami AND (b) bar 3 closes beyond bar 1's body.
• No size requirement on bar 3. The third bar's body size is unconstrained — only its closing price relative to bar 1's open matters.
• Reset. Clears the two-bar history.

Examples

Rust

use wickra::{Candle, Indicator, ThreeInside};

fn main() -> Result<(), Box<dyn std::error::Error>> {
    let b1 = Candle::new(12.0, 12.5, 9.5, 10.0, 1.0, 0)?;   // long red
    let b2 = Candle::new(10.5, 11.5, 10.4, 11.0, 1.0, 1)?;   // small green inside
    let b3 = Candle::new(11.0, 13.0, 10.9, 12.5, 1.0, 2)?;   // green closes above 12 (b1.open)
    let mut ti = ThreeInside::new();
    ti.update(b1); ti.update(b2);
    println!("{:?}", ti.update(b3));  // +1.0
    Ok(())
}

Python

import numpy as np
import wickra as ta

o = np.array([12.0, 10.5, 11.0])
h = np.array([12.5, 11.5, 13.0])
l = np.array([ 9.5, 10.4, 10.9])
c = np.array([10.0, 11.0, 12.5])

ti = ta.ThreeInside()
print(ti.batch(o, h, l, c))

Node

const wickra = require('wickra');
const ti = new wickra.ThreeInside();
console.log(ti.batch([12, 10.5, 11], [12.5, 11.5, 13], [9.5, 10.4, 10.9], [10, 11, 12.5]));

Streaming

use wickra::{Candle, Indicator, ThreeInside};

let mut ti = ThreeInside::new();
let candle_stream: Vec<wickra::Candle> = Vec::new(); // your live OHLCV candle feed
for bar in candle_stream {
    if ti.update(bar) == Some(1.0) { /* Three Inside Up */ }
    if ti.update(bar) == Some(-1.0) { /* Three Inside Down */ }
}

Interpretation

• Confirmed Harami. The third-bar confirmation is what distinguishes this from a plain Harami. Statistically more reliable as a reversal signal.
• At trend extremes. Most powerful at swing highs / lows. In ranges, it's just noise.
• Vs Three Outside. Three Inside requires the smaller body to come first (Harami pattern); Three Outside requires the smaller body to come second (Engulfing-style). See ThreeOutside.

Common pitfalls

• Wrong body order. Three Inside requires the order Harami → confirmation; Three Outside requires Engulfing → confirmation.
• No conviction filter. The third bar can have any size; some traders require it to be a "strong" body before acting.

References

• Steve Nison, Japanese Candlestick Charting Techniques (1991).

See also

• Harami — unconfirmed two-bar version.
• ThreeOutside — sibling three-bar pattern.
• MorningEveningStar — another three-bar reversal.
• Indicators-Overview — full taxonomy.