Unique Three-River Bottom

A new low, held the next day

By: 42Fibonacci
Updated: 27 Oct 2026
Read time: 6–8 min

A Unique Three-River Bottom is a three-candle bullish reversal pattern formed after a decline: a long red candle, a red candle inside it whose long tail sets a new low, and a small green candle that closes below candle 2's close but stays above that low. A later close above candle 2's high confirms it.

At a glance

Type: Three-candle reversal
Signal: Bullish, after a decline
Key rule: Candle 2 sets a new low on a long tail; candle 3's low stays above it
Story: Sellers broke the low, lost it, and could not get back there
Confirmation: A later close above candle 2's high, or candle 1's high for the strict version
Fails: On a close below candle 2's low

What Is a Unique Three-River Bottom?

A Unique Three-River Bottom is a three-candle pattern that forms after a decline. It is filed as a bullish reversal. Each candle has a job, and the pattern only exists when all three do it.

Candle 1 is a long red candle: the decline still in charge. Candle 2 is red too, with a smaller body that sits inside candle 1's body. Its long lower shadow, the thin line below the body, reaches below candle 1's low to a new low. Candle 3 is a small green candle. It closes below candle 2's close, and its low stays above candle 2's low.

Candles 1 and 2 on their own are a Homing Pigeon: two red candles, the second body inside the first. What this pattern adds is the new low on candle 2's tail and the quiet session after it.

Candle 1: A long red candle. Sellers are in control of the decline.
Candle 2: Red, with its body inside candle 1's body and a long lower shadow that sets a new low below candle 1's low. Buyers took most of that drop back by the close.
Candle 3: Small and green, closing below candle 2's close. Its low stays above candle 2's low: the new low was not revisited.

Note

Why it is rare. Three conditions have to line up: a red candle whose body sits inside the one before, a tail that still makes a new low, and a small green session that stays above that low. Each is common; all three in a row, at the end of a decline, are not. The name comes from Japanese candlestick tradition, and the picture behind “three rivers” is not well documented. Read it as a label.

How a Unique Three-River Bottom Forms

Three sessions: a push down, a new low that fails, and a test.

The push

"Another big red day. This is still going down."

Candle 1 opens near its high and closes near its low. The decline is intact and sellers are confident.

The new low

"It broke the low, then bounced most of the way back."

Candle 2 opens inside candle 1's body and drops below candle 1's low. Buyers meet it there and push price back up, but not above the open, so the candle still closes red. What stays on the chart is a small body over a long tail.

The test

"Quiet day. It drifted lower but never got near the new low."

Candle 3 opens lower, holds a narrow range and closes a little higher than it opened. It ends below candle 2's close, but sellers never push it back to candle 2's low.

Candle 3 is what sets this pattern apart. Most three-candle bottoms end on a strong green candle. This one ends on a small one that closed lower than the day before. Its message is not strength. It is that sellers had a whole session to return to the new low, and did not.

Is a Unique Three-River Bottom Bullish or Bearish?

Bullish by name, after a decline. The candles show a new low that was rejected and then left alone for a session. They do not show buyers pushing price higher. The last close is still lower than candle 2's, so the decline is in place until a close says otherwise.

The confirmation decides. A later close above candle 2's high is the first close that shows buyers taking over. A close below candle 2's low fails it: sellers got through the level buyers defended, and the idea is over.

Note

Traders disagree on how high the confirming close must be. One option is a close above candle 2's high, the nearer level. The stricter option is a close above candle 1's high, the top of the whole pattern; it asks for more and leaves the entry further from the stop. Pick one and use it every time. The Three Inside guide walks through what a stricter confirmation costs.

Which Low Did Candle 3 Hold?

Candle 3 is easy to misread. It is small, and it closed lower than candle 2. Judged by its size and its close, it looks like the decline carrying on. The useful read is its low.

After candle 2 there are two lows on the chart. Candle 1's low is the old low, and it is already broken. Candle 2's low is the new low, the price where buyers turned the drop back. Candle 3's low tells you which of the two still matters.

Which low did candle 3 hold?Illustrative

Candle 2 broke candle 1's low and set a new low on a long tail. Candle 3 is small and closes lower than candle 2, yet its low, inside the shaded band, stays above candle 2's low. It dipped under the old low but did not reach the new one, so the floor buyers defended held. The first close above candle 2's high confirms it; traders on the strict rule wait for a close above candle 1's high, later and further from the stop.

Below the old low is fine
Candle 3 can dip under candle 1's low. That level was broken the day before, so trading under it again says nothing new.
Above the new low is the point
If candle 3's low stays above candle 2's low, sellers had a full session to retest the new low and did not reach it. That is the hold the pattern is built on.
At or through the new low, it is gone
If candle 3 trades down to candle 2's low or below it, the new low did not hold, and on the usual definition the pattern is not there. A close below it is a failed bottom.

The read also puts the stop in the right place. The level that counts is the newest low buyers defended, candle 2's low. A stop just under candle 1's low sits inside the zone candle 3 is allowed to trade through, so a normal test can hit it.

Tip

The skill carries to any quiet day after a new low. When a small candle follows a rejected low, don't judge it by its body or its close. Find the last low buyers took back, and check whether the quiet day reached it.

Unique Three-River Bottom vs. Morning Star, Three Inside Up and Hammer

Several bottoms share parts of this shape. The third candle and the new low tell them apart.

Unique Three-River

Candle 2 is red, inside candle 1's body, with a tail to a new low
Candle 3 is small and closes below candle 2's close

Morning Star

Candle 2 is a small body below candle 1
Candle 3 is a strong green candle that closes well into candle 1's body

Three Inside Up

Candle 2 is green, inside candle 1's body; no new low required
Candle 3 closes above candle 1's open

Hammer

One candle: a small body over a long lower tail
Confirmed by a later close above its high

The Morning Star ends strong. Its third candle is a long green candle that closes well into the first candle's body, so the turn is visible in the pattern itself. Here the third candle is small and closes lower, so the pattern leaves the turn to a later close. Read the Morning Star guide →

The Three Inside Up doesn't need a new low. Its second candle is green and stays inside the first, and its third closes higher. The Unique Three-River breaks the low first, and its third candle holds rather than rises. Read the Three Inside guide →

Candle 2 looks like a Hammer. A small body over a long lower tail is the Hammer's shape, and some traders read candle 2 that way. The difference is what happens next: a Hammer waits for a close above its high, while this pattern first adds a session that tests the low. Read the Hammer guide →

How to Trade a Unique Three-River Bottom

Check there was a decline
Look for lower highs and lower lows into candle 1. Without a decline there is no bottom to form.
Check all three candles
Candle 2's body inside candle 1's, with a tail to a new low. Candle 3 small and green, closing below candle 2's close. Then check candle 3's low against candle 2's low.
Wait for the confirming close
Don't buy candle 3's close; it closed lower than the day before. Wait for a later close above candle 2's high, or above candle 1's high if you use the strict version.
Put the stop below candle 2's low, and size for it
Place the stop a little below candle 2's low, the pattern's lowest point. Not under candle 1's low, which is already broken. Measure the distance from your entry to that stop and size the position from it.

Warning

The new low makes the stop wide. Candle 2's tail is the lowest point of the pattern, and the confirming close is well above it, so the entry-to-stop distance is wide. Work it out before deciding the trade is worth it.

Worked example

A stock has fallen for three weeks. Candle 1 opened at $31.80 and closed at $29.60 (high $31.90, low $29.40). Candle 2 opened at $30.20, fell to $28.70 and closed at $29.85, with a high of $30.30. Candle 3 opened at $29.30, dipped to $29.00 and closed at $29.50. The next session closes at $30.45. You plan to risk $370.

Candle 3 traded below candle 1's low. Did the pattern fail, where does the stop go, and is it confirmed?

The approach

It did not fail. Candle 2's body ($29.85 to $30.20) sits inside candle 1's ($29.60 to $31.80), and its tail set a new low at $28.70, 70 cents under candle 1's $29.40 low. Candle 3 is small and green and closes at $29.50, below candle 2's $29.85 close. Its $29.00 low is under the old low, which was already broken, but 30 cents above the new one, so the low buyers defended held. The next close, $30.45, is above candle 2's $30.30 high, which confirms it on the nearer rule; the strict rule would still be waiting for a close above $31.90. A stop ten cents below candle 2's low, at $28.60, risks $1.85 a share from $30.45, so $370 buys 200 shares. A stop just under candle 1's low, at $29.30, would have been in the range candle 3 had just traded through.

Reading a Unique Three-River Bottom in Context

The candles say a new low was rejected and then left alone. Context says whether that low is somewhere traders care about.

Support and ranges. When candle 2's tail breaks the floor of a sideways range and closes back inside, it is a false break of that floor, and candle 3 is the test of it. Read the Candlesticks + Trading Ranges guide →

Moving averages. A pattern that forms where a pullback reaches a rising 50-day moving average reads as a pullback being bought inside an uptrend. Under a falling average it is a pause inside a downtrend until a close says otherwise. Read the Candlesticks + Moving Averages guide →

Volume. Heavy volume on candle 2 means many traders took part in the drop and the recovery, so the rejected low was well tested. Light volume on candle 3 fits the picture of sellers who did not come back. Read the Candlesticks + Volume guide →

Common Unique Three-River Bottom Mistakes

Mistake	Instead
Judging candle 3 by its size Candle 3 is tiny and closed lower. Buyers are weak; skip it.	Its size is the pattern's normal shape. Check its low against candle 2's low: that is what the session tested.
Watching the wrong low Candle 3 went under candle 1's low, so the bottom failed.	Candle 1's low was already broken by candle 2. The level that matters is candle 2's low, the one buyers defended.
Buying before the confirmation Three candles are in. Buy the close of candle 3.	Candle 3 closed below candle 2's close. Wait for a later close above candle 2's high, or candle 1's if you use the strict rule.
Putting the stop under the old low Stop just under candle 1's low, to keep the risk small.	That level is already broken and inside candle 2's tail. The idea fails below candle 2's low; put the stop there and size from it.

Key takeaways

A Unique Three-River Bottom is a long red candle, a red candle inside it whose tail sets a new low, and a small green candle that closes below candle 2's close and stays above that low, after a decline
Judge candle 3 by its low, not its size: under candle 1's low is fine, at or under candle 2's low is not
The candles alone don't settle the direction: a later close above candle 2's high confirms it (candle 1's high on the strict rule), and a close below candle 2's low fails it
The stop goes under candle 2's low, the newest low buyers defended, not under candle 1's broken low
Unlike a Morning Star, it ends on a small candle, so the turn waits for a later close

Frequently Asked Questions

What is a Unique Three-River Bottom?

A three-candle pattern that forms after a decline and is filed as a bullish reversal: a long red candle, a red candle whose body sits inside the first and whose long lower shadow sets a new low, and a small green candle that closes below the second candle's close and stays above its low.

Is the Unique Three-River Bottom bullish or bearish?

Bullish by name, after a decline. The candles show a new low that was rejected and then left alone for a session, not buyers pushing price higher. A later close above candle 2's high confirms it; a close below candle 2's low fails it.

Can the third candle go below the first candle's low?

Yes. Candle 2 already broke candle 1's low, so trading under it again says nothing new. The level that matters is candle 2's low, the new low buyers took back. If candle 3 reaches that low, on the usual definition the pattern is not there.

Why is the third candle so small?

That is the pattern's normal shape. Most three-candle bottoms end on a strong green candle; this one ends on a small one that closes lower than the day before. Its message is not strength but that sellers had a whole session to return to the new low and did not.

What confirms a Unique Three-River Bottom?

A later close above candle 2's high. Traders disagree on how strict to be: some wait for a close above candle 1's high, the top of the whole pattern, which asks for more and leaves the entry further from the stop. Pick one rule and use it every time.

Where do you put the stop loss on a Unique Three-River Bottom?

A little below candle 2's low, the lowest point of the pattern and the low buyers defended. Not under candle 1's low, which is already broken and inside candle 2's tail. Size the position from the distance between your entry and that stop.

What is the difference between a Unique Three-River Bottom and a Morning Star?

The third candle. A Morning Star ends on a strong green candle that closes well into the first candle's body, so the turn shows inside the pattern. A Unique Three-River Bottom ends on a small green candle that closes lower than candle 2, so the turn waits for a later close.

How is a Unique Three-River Bottom different from a Three Inside Up?

A Three Inside Up doesn't need a new low: its second candle is green and stays inside the first, and its third closes higher. A Unique Three-River Bottom's second candle is red and makes a new low on its tail, and its third candle holds rather than rises.

Why is the Unique Three-River Bottom rare?

Three conditions must line up at the end of a decline: a red candle whose body sits inside the one before, a tail that still makes a new low, and a small green session that stays above that low. Each is common on its own; all three in a row are not.

Is there a bearish Unique Three-River pattern?

The traditional pattern is bullish only. A few sources describe a mirror version after a rally, but it is not part of the standard pattern list.

The Bottom Line

A Unique Three-River Bottom is a new low that buyers took back, followed by a quiet session that did not go back to it. The lesson it teaches is to read a small candle by its low. A session that closes lower can still be the one that shows sellers ran out of reach.

Find the newest low buyers defended and check whether the next session reached it. Wait for a close above candle 2's high, or candle 1's on the strict rule, put the stop below candle 2's low, and size the trade from that distance.

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