Three River Bottom Pattern

Three River bottom is a three-candle pattern doesn’t occur frequently but the formation is very interesting. It is a bullish trend reversal pattern that indicates that the strong bottom is in place.

In the downtrend, the strong bearish candle appears which suggests that there is a strong bearish environment.

It is followed by another bearish candle but the body of the second candle is relatively smaller. Even though the second candle is bearish, the closing price of the second candlestick pattern is higher than the previous candle closing price. This is an indication that even though scenario is bearish, the bears could be losing the momentum.

The third candle turns out to be a bullish candlestick pattern with a very small body. It indicates that now the selling is probably drying up and there is a possibility that bulls can strike back. This formation is known as a Three River Bottom pattern. It is a bullish trend reversal formation.

After the Three River Bottom pattern, the trend is not bearish if price remains above the bottom price of the third candle of the pattern.

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This pattern can be plotted on the chart by adding it from the study menu in TradePoint & RZone. The pattern is also available in the system builder section. By combining this pattern with other patterns and indicators, you can create your own trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.


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