A harami only proves a stall. Three inside up and three inside down add the missing piece — a third candle that closes past the first candle's open, turning a question into an answer.
The harami itself carried a name in the Sakata ledgers — but a trader watching live simply waited for the next candle. The specific three-candle package never earned its own classical name.
Bar charts show a contained range and a break of it easily enough — but pairing that with the specific harami-containment definition isn't native to bar-chart language.
Steve Nison's 1991 catalog names three inside up and three inside down explicitly as harami plus confirmation — giving traders permission to act where the bare harami alone counseled patience.
Because it bakes the «wait for confirmation» discipline directly into its definition, three inside up/down is one of the more reliable three-candle signals in regular use.
Candle one is long. Candle two sits fully contained inside it — a harami. Candle three closes beyond candle one's open — the harami, plus the confirmation, in one three-candle unit.
Three inside up: after a decline, the third candle closes above candle one's open. Three inside down: after an advance, the third candle closes below candle one's open — the exact mirror.
A bare harami only proves a stall, not a direction. Three inside up/down bakes the missing piece — a real directional confirmation — directly into its definition, which is why it's treated as more reliable than an unconfirmed harami alone.
A harami forms right at the fastest bear market's final low, and within a session or two a confirming close above the first candle's open completes a textbook three inside up.
Near the all-time high, a harami forms, and the confirming close below the first candle's open completes the reversal signal days before the broader decline.
Amid the sharp Q4 2018 decline, a harami near the December low is confirmed within days, marking an early, tradeable signal ahead of the recovery.
A long red candle, then a small contained candle, then a third candle that closes above the first candle's open. What is this?
The same setup appears, but the third candle only closes just above candle two's high — not above candle one's open. Is this confirmed?
A textbook three inside up completes, with the third candle closing beyond candle one's entire range, not just its open. How does this compare to a close that barely clears the open?
Three sessions, watched as they happen. The harami and its answer build tick by tick on the left — and the mark they leave in the ledger on the right. Confirmed at a low, at a high — and the harami that never got its answer.
A harami, and a third candle at the end of it. Measure exactly where the close lands relative to candle one's open — then call it: long, short, or stand aside.
The classic error is treating the bare harami — two candles — as if it were already three inside up or down. The discipline is to wait for the specific close-beyond-the-open confirmation, and grade it by how far beyond.
A harami alone asks a question. Three inside up and three inside down are the specific, named answer — the confirmation baked directly into the pattern so nobody has to guess whether the stall meant anything. Wait for the third candle, measure how far it clears the first candle's open, and only then believe the reversal.
«Fretting over it is harder than just doing it.»