Three White Soldiers

 Three White Soldiers Definition

The Three White Soldiers candlestick pattern is unusual in that its meaning depends on its context. However, the pattern itself is easy to spot. This training is simply three days in a row with a white candle, each higher than the last. The apparition is of three white soldiers standing in a row, hence the name. The bullish significance of this formation is easy to guess. But how reliable is this indicator?

 

This indicator is quite strong and very reliable in most situations, indicating an accumulation of bullish strength. For example, when a market is flat or moving mostly sideways, the three white soldiers indicate that the bulls are gaining ground. When the market has entered a downtrend, this candlestick pattern indicates a reversal. However, when the market is constantly progressing, the three white soldiers are considered less important. That's because they fit the current blueprint and aren't even really considered a sequel.

 

How to identify the Three White Soldiers Candlestick Pattern? 

A three-soldier white candlestick consists of three long white royal bodies separated by two black royal bodies. The third long white body should be wider than the first two.

It is formed when three consecutive long candles are formed:

1The first candle must be black, which means that it opens above the opening price of its previous candle but closes below it.

2A second white candlestick should open above the close of the previous one and also close above your open position.

3A third white candle should form with a long body that should stay within or slightly above the range of your previous two candles for the day.

A three white soldier’s candlestick pattern indicates that prices have reached a temporary low after a prolonged decline. A break above the resistance level will confirm the uptrend reversal and suggest that prices will continue to rise. Therefore, the Three White Soldiers candlestick is most effective when used with other technical indicators. This is significant as it suggests a continuation of the uptrend despite several small pullbacks. Therefore, traders can use Three White Soldiers as a signal to enter long positions.

What does the pattern tell traders?

The Three White Soldiers candlestick pattern is a bullish reversal pattern. This indicates that the bears are losing control and a market reversal is very likely. In this pattern, each candle must be above the close of the previous candle, creating a ladder where each step is higher than the previous one. This upward movement of the pattern is actually an indication of the start of an uptrend.

 

As we have already mentioned, the model of the three white soldiers is a very solid and reliable model. This is especially true when used in conjunction with other indicators like the relative strength index. Therefore, it is also an excellent tool for trading strategies. However, traders must also consider other factors such as volume.

 

The Three White Soldiers pattern helps start or exit existing operations. For example, a trader may enter a long position when the Three White Soldiers candlestick appears on the chart and the next candlestick shows an open gap (the opening price is higher than the previous day's closing price). It is also useful for day trading where traders can also look for the three white soldiers on 5 minute, 15 minute or hourly charts. After initiating a long position, it is always advisable to set a stop loss at the last low and take profit whenever there are more signs of a trend reversal. Although it is quite rare to spot the Three White Soldiers candlestick pattern, it is a very useful pattern that traders should never ignore.

 

Difference between three white soldiers and three black crows:

 

The opposite of the three white soldiers is the candlestick pattern with the three black crows. Three Black Crows consists of three consecutive long-bodied candles that open at the real body of the previous candle and close lower than the previous candle. As three white soldiers capture the bears passing the bulls, three black crows show the bears taking control of the bulls. The same caveats regarding volume and additional confirmation apply to both samples.

The three black crows candlestick pattern is the opposite of the three white soldiers.

Three black crows consist of three consecutive bearish candlesticks.

On the other hand, three white soldiers indicate a change from bearish to bullish and consist of three consecutive bullish candlesticks Read More...

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