The Unique Three River Bottom is a bullish pattern, somewhat characteristic of
the Morning Star Pattern. It is formed with three candles. At the end of a
downtrend, a long black body is produced. The second day opens higher, drops
down to new lows, then closes near the top of the trading range. This is a
Hammer-type formation. The third day opens lower but not below the low of the
previous day. It closes higher, producing a white candle. But it doesn’t close
higher than the previous day’s close. This pattern is a rare pattern.

Criteria


1. The candlestick body of the first day is a long black candle, consistent
with the prevailing trend.
2. The second day does a harami/hammer. It also has a black body.
3. The second day’s shadow has set a new low.
4. The third day opens lower, but not below the lowest point of the previous
day. It closes higher but below yesterday’s close.

Signal Enhancements


1. The longer the shadow of the second day, the probability of a successful
reversal becomes greater.