Showing posts with label three-white-soldiers-strategy. Show all posts
Showing posts with label three-white-soldiers-strategy. Show all posts


 Three White (Green) Soldiers

Three White soldiers

Three White (Green) Soldiers

Three white soldiers is a candlestick chart pattern in the financial markets. It unfolds across three trading sessions and suggests a strong price reversal from a
bear market to a bull market. The pattern consists of three long candlesticks that trend upward like a staircase; each should open above the previous day's open, ideally in the middle price range of that previous day.

                                                           Each candlestick should also close progressively upward to establish a new near-term high. [1] The three white soldiers help to confirm that a bear market has ended and market sentiment has turned positive. In Candlestick Charting Explained, technical analyst Gregory L. Morris says "This type of price action is very bullish and should never be ignored." [2] This candlestick pattern has an opposite known as the Three Black Crows, which shares the same attributes in reverse.

Let`s See Example In a Chart

Three White Soilders Pattern

pattern psychology

The first of the three advancing white soldiers is a reversal candle. It either ends a downtrend or signifies that the stock is moving out of a period of consolidation after a decline. The candle on day two may open within the real body of day one. The pattern is valid as long as the candle of day two opens in the upper half of day one's range. 

                                                            By the end of day two, the stock should close near its high, leaving a very small or non-existent upper shadow. The same pattern is then repeated on day three.

Although this candle pattern is very potent when a stock is at or near its lows, it should be regarded skeptically if it appears following a long advance in price. If you spot three white soldiers after a sustained rally, then it may mean a top is near. Be on the alert then for a reversal candle such as a doji or negative  engulfing.

the colour of candles doesn`t matter 

white candle = green candle (bullish candle)

black candle = red candle (bearish candle)