How to Trade the Three White Soldiers Candlestick Pattern IG International

When this pattern emerges, it usually indicates that signs of strength lie ahead, especially when observed at a low price or after a period of stable prices. In general, it’s safe to say that the three white soldiers are a relatively straightforward and definite pattern. Once you learn to spot it correctly and build a solid strategy based on this pattern, it can become https://forexhero.info/python-linear-optimization-package/#toc-2 your good helper in earning on trading. In combination with RSI and stochastic indicators, this pattern can give you quite reliable results. Like many other trading patterns’ names, the three white soldier pattern’s name is based on how it looks on the graph. The three green (traditionally white in the stock market) ascending candles resemble three soldiers on guard.

Please note that this is just a basic guide and does not guarantee success in trading. It is important to also consider other technical and fundamental factors before making a trade. You could use the TickTrader platform to view charts and discover trading opportunities. Harness the market intelligence you need to build your trading strategies. All legal rights of publications hosted on this website are protected by the international intellectual property legislations. Using any audio, video, and text materials is permitted only if there is a direct link to source materials.

Closing thoughts

Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it. Finally, checking the market’s volume can provide insight into the strength of a trend. If volume remains solid, then buying pressure should still be in place – and the upward move should continue.

Candlestick patterns are some of the most important tools in technical analysis. The patterns stand out as they provide valuable information about what happened in a given trading session. Their alignment also provides valuable information on prevailing market sentiment, and the direction price is likely to move.

Candlestick Charts – Reversal Patterns

In the uptrend, the three white soldiers are a continuation pattern. We can conclude that regardless of the market situation, the three white soldiers are always followed by the uptrend. Another thing you always learn from spotting the three white soldiers is that buying pressure prevails over the selling one. Other continuation candlestick patterns are the abandoned baby and two gapping lines.

Basically, the bulls take over the rally all session and close near the high of the day for three consecutive sessions. In addition, the pattern may be preceded by other candlestick patterns suggestive of a reversal, such as a doji. Studies have shown that the pattern occurs in nearly one in every 3,000 candles. Nevertheless, the pattern is fairly reliable for a bullish reversal candlestick pattern due to its rarity.

What Is the Difference Between 3 White Soldiers and 3 Black Crows?

To identify the pattern, look for three consecutive bullish candlesticks that close higher. In this case, the candle might open within the previous candle’s body but must close higher. Furthermore, traders can use the Three Advancing White Soldiers pattern in conjunction with an oscillating indicator, such as the RSI, that shows the security to be oversold. To trade when you see the three white soldiers candlestick pattern, you can use derivatives such as spread bets or CFDs. With these financial products, you can trade rising and falling markets because you don’t take ownership of the underlying assets. While the three white soldiers typically appear at the end of a bearish trend, it can also appear after a period of consolidation, though this is not considered a strong bullish signal.

As such, unless of a major event, the path of the least resistance for the asset will be to the upside. A three black crows, on the other hand, could be formed after the FTSE 100 has climbed to 7100, gaining 120 points in its last candlestick. The first falling around 60 points, the second dropping below 6980 and the third adding to the bear run. This is a very simple trading strategy and one that I’ve been using for years. This is great if you trade higher time frames and need to do other things or to put the currency pair on a watch list for later.

Variants of the Three White Soldiers Candlestick Pattern

Ideally, to increase the accuracy, we want to trade the Three White Soldiers candlestick pattern by combining it with other types of technical analysis or indicators. 3 white soldiers are typically signals for the beginning of an uptrend. They help signify the beginning of a bullish reversal, as they always come up at the end of a downtrend. The 3 white soldier pattern identifies periods in which a trend reversal is likely to occur. The market indicator is efficient in pointing out the gradual end of the bears and the return of the bulls.

You must also consider the context of risk and reward before making a trade based solely on a candlestick pattern. Understanding risk/reward analysis is crucial for making informed trading decisions. Third, you can use the pattern in combination with technical indicators and charting patterns.

What is the Three White Soldiers Candlestick Pattern?

The bullish pattern consists of three consecutive long-bodied candlesticks that open within the previous candle’s real body and close above the previous candle’s high. 3 white soldiers are a set of Japanese candlestick patterns pointing to a bullish reversal after a strong bear market. They are three green candles that follow one another sequentially in an army-like position. The three white soldiers is a bullish trend reversal candlestick pattern that can help determine future price movements.