Concept
Three-bar Reversal
Three-bar Reversal is a Chart & Candlestick Patterns concept. The Library holds 3 implementations, each one a working definition you can pull into Quant.
Top Three-bar Reversal indicators
3 total
What is a Three-bar Reversal?
A three-bar reversal is the smallest complete turn a chart can print. In the bullish form, a down bar is followed by a bar that makes the lowest low of the sequence, and then a third bar that closes back above the middle bar's high. The middle bar's extreme becomes a local pivot, the same geometry as a strength-one swing low, and the third bar's close is the confirmation that the probe lower found no follow-through selling. The bearish version mirrors this at a high.
Definitions vary in strictness: some sources require the third bar to close above the highs of both preceding bars, others only above the middle bar's high, and some add rules about where the middle bar must close. Looser and tighter cousins exist as the two-bar reversal and N-bar generalizations; all encode the same probe-and-reject logic at different confirmation costs.
How traders use it
- As an entry trigger at a location: a bullish three-bar reversal printing into support, a value-area edge, or a pullback within an uptrend, entered on the third bar's close or a break of its high.
- As an invalidation anchor: the middle bar's extreme is the natural structure stop; if price trades back through that pivot, the reversal premise is gone.
- As a scan primitive: the definition is fully mechanical, so it codes cleanly, but raw signals without a location or trend filter fire constantly and degrade accordingly.
Related concepts · Single/multi-bar (western)
Concept family
Chart & Candlestick Patterns
84 concepts mapped · 46 in the Library
Three-bar Reversal FAQ
What is the difference between a three-bar reversal and a swing low?
The geometry overlaps: a bar with higher lows on both sides is a strength-one swing low either way. The three-bar reversal adds a close-based rule, the third bar closing back above the middle bar's high, which turns a pivot that can only be labeled after the fact into an explicit trigger with a defined confirmation bar.
Is a three-bar reversal reliable on its own?
No. Three-bar sequences appear constantly on every timeframe, and most mark nothing but noise. The pattern earns its keep as a timing trigger once something else frames the trade: a level, a higher-timeframe trend, a sweep of an obvious low. Confirmation on the third bar narrows the trigger; it does not make the reversal likely by itself.
Build Three-bar Reversal your way.
Quant writes, tests, and refines it with you — then it runs on LuxAlgo charting or ports to TradingView.