Admin
April 05, 2020
The Three White Soldiers is a bullish reversal pattern that indicates a strong shift from a downtrend to an uptrend. It consists of three consecutive long bullish candles, each opening within or slightly higher than the previous candle and closing progressively higher. This pattern suggests that the buyers have gained control of the market and are pushing the price higher after a downtrend.
• A long green (bullish) candle that opens near the previous close and closes at the high of the day, indicating that buyers are in control and the price is rising.
2. Second Candle (Bullish)• Another long green (bullish) candle that opens within or slightly above the previous candle’s close and closes higher than the first candle. The second candle confirms that the bullish momentum is continuing and that the market is reversing from its previous downtrend.
3. Third Candle (Bullish)• The third long green (bullish) candle opens within or slightly above the second candle’s close and closes higher, again showing strong buying pressure. This confirms the trend reversal and the beginning of an uptrend.
✅ The pattern consists of three consecutive long bullish candles.
✅ Each candle opens within the previous candle’s body or slightly above it and closes progressively higher.
✅ The bullish candles should have relatively large bodies and little to no wicks, indicating that buyers are in control and there is little opposition from sellers.
✅ The pattern signals the end of a downtrend and the beginning of an uptrend, as the price gradually moves higher over the course of three days (or candlesticks).
• The first candle in the Three White Soldiers pattern represents the initial reversal in the market, showing that buyers are starting to dominate after a downtrend.
• The second candle confirms that the reversal is strong, with buyers continuing to push the price higher.
• The third candle completes the pattern, indicating that the reversal is fully in motion and that buyers have regained control of the market.
• The lack of wicks or very small wicks on the candles suggests that the price is moving upward with minimal resistance from sellers.
📌 Entry: Enter a long position after the third candle closes, confirming that the uptrend is beginning.
📌 Stop-loss: Place the stop-loss below the low of the third candle (for a more conservative approach) or below the low of the first candle to allow for more room in case of a slight pullback.
📌 Target: The target can be based on the next resistance level or a set risk-reward ratio (e.g., 1:2).
• The Three White Soldiers pattern is a bullish reversal and is most effective when it appears after a prolonged downtrend. If the market was in a strong uptrend already, this pattern may not be as reliable.
• Volume should ideally increase on each of the three bullish candles, confirming that the buying pressure is genuine and not just a temporary spike.
The Three White Soldiers is a powerful bullish reversal pattern that signals a trend change from a downtrend to an uptrend. It represents a clear shift in market sentiment, where buyers have taken control, and the market is likely to continue rising. This pattern is particularly useful when it forms after a significant downtrend and can offer high-probability long entry signals.