Bullish Three Bar Reversal

THREE-BAR REVERSAL

What does it look like?

In sequence, the three bars of the bullish pattern are:

1. A bearish bar
2. A bar has a lower high and lower low
3. A bullish bar with a higher low and closes above the high of the second bar

Accordingly, the bearish pattern is made up of:

1. A bullish bar
2. A bar has a higher high and higher low
3. A bearish bar with a lower high and closes below the low of the second bar

What does it mean?

A three-bar reversal pattern shows a turning point. Compared to the other reversal patterns, the three-bar reversal pattern is the most conservative one as it extends over three bars, using the third bar to confirm that the market has changed its direction.

How do we trade it?

1. Buy above the last bar of the bullish pattern
2. Sell below the last bar of the bearish pattern

Equitas_Example

NIITTECH_Example

Read: Adapting the Three-Bar Reversal for Day Trading

WockPharma_Example