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Three River Bottom Pattern – Bullish Reversal Guide

Learn the Three River Bottom bullish reversal pattern: how to spot its three candles, trade it safely, and avoid common beginner mistakes.

Mark · Trader & Founder, Social Forex

Three River Bottom Pattern – Bullish Reversal Guide

What Is the Three River Bottom Pattern?

The Three River Bottom is a three-candle bullish reversal pattern that appears at the end of a downtrend. It shows that selling pressure is weakening and buyers are starting to take control. The name “Three River” comes from the way the three candles form a river-like shape as the bottom develops.

How to Identify

  • Candle 1: a long bearish candle with a big red/black body, showing that sellers are in control.
  • Candle 2: another down candle that makes a lower low than candle 1, but it has a long lower shadow or closes near the high, proving that buyers absorbed the low prices.
  • Candle 3: a small green/white bullish candle that closes above candle 2’s close, confirming that the reversal may begin.
    • Price Action — reading candlestick patterns in context

    How to Trade

  • Wait for the pattern to complete: only enter after candle 3 closes.
  • Enter long when price breaks above the high of candle 3, or when price pulls back to the pattern area and bounces.
  • Place a stop loss below the low of candle 2, because it is the lowest point of the pattern.
  • Take profit at the nearest resistance zone or use a reward/risk ratio of 1:2.

    • Real Example

    Imagine EURUSD falls from 1.1800 to 1.1500. Near the support zone, three candles form the Three River Bottom pattern. After candle 3 closes, price rises to 1.1700. If you buy at 1.1550 and place a stop below 1.1500, your risk is limited and the target is reached.

    Common Mistakes

  • Trading as soon as the second candle forms, without waiting for the third confirmation candle.
  • Not using a stop loss, which can badly hurt your account if the pattern fails.
  • Confusing this pattern with other three-candle patterns, such as three white soldiers.
  • Ignoring the bigger trend: if the pattern appears in the middle of a very strong downtrend, the chance of a reversal is lower.

    • Content is for reference only, not investment advice. Forex trading carries high risk.

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