Three Inside Up/Down Patterns Indicator MT5

The Three Inside Up/Down Patterns Indicator is a candlestick pattern recognition designed to highlight the three inside up with white arc and down with yellow arc formations. These classic patterns used in technical analysis to identify potential trend reversals. 

Moreover, traders often used these formations, which consist of three consecutive candles, to signal a shift in market sentiment: 

• Bullish Reversal Pattern (Three Inside Up):

1. Candle 1: A long bearish candle.
2. Candle 2: A smaller bullish candle that forms inside the body of the previous candle.
3. Candle 3: A bullish candle that closes above the high of candle 1.

This suggets a weakening of bearish momentum and the potential start of a bullish reversal.

• Bearish Reversal Pattern (Three Inside Down):

1. Candle 1: A long bullish candle.
2. Candle 2: A smaller bearish candle that forms inside the body of the previous candle.
3. Candle 3: A bearish candle that closes above the low of candle 1.

This siganls a shift from bullish to bearish sentiment, pointing to a posiible downward reversal.

1/ In the NZDCAD chart example on MetaTrader 5, the Three Inside Up/Down Patterns Indicator detects a white arc at the end of a downward trend, signaling the formation of a bullish Three Inside Up pattern, a strong indication of a potential bullish reversal.

In this situation, traders are advised to close their short trades and consider entering long, as the bullish pattern suggests that the market is controled by buyers and the price is likely to rise.

2/ In the EURGBP chart example on MetaTrader 5, the Three Inside Up/Down Patterns Indicator detects a yellow arc at the end of an upward trend, signaling the formation of a bearish Three Inside Down pattern, a significant indication of a potential bearish reversal.

In this scenario, traders are advised to close their long positions and consider entering short, as the bearish pattern suggests that sellers are gaining control and the price is likely to decline.