How Three-Candle Reversal Structure Acts on charts

!BELRISE A Three-Candle Reversal Structure uses the relationship between three consecutive candles to identify a potential change in short-term market direction. The first candle generally represents the existing trend, the second reflects hesitation, rejection or a loss of momentum, and the third provides confirmation by moving strongly in the opposite direction. In a bullish reversal, the structure may develop after a decline, with sellers initially controlling price, followed by a period of indecision or rejection, and finally a strong bullish candle showing renewed buying pressure. In a bearish reversal, the opposite sequence can occur after an extended rally. The pattern becomes more significant when it develops near important support or resistance, supply or demand zones, or after an extended directional move. Volume and candle-closing strength can provide additional confirmation. Traders should focus on the story created by the three candles, rather than memorizing a particular shape. A reversal structure is more reliable when the third candle also breaks an important short-term swing level.