How to Identify & Trade Three White Soldiers Patterns

  • May 18, 2018

Watch our video on how to identify and trade three white soldiers patterns.

What Is a Three White Soldiers Pattern & How to Identify These Patterns?

  • Three white soldiers patterns are made up of all bullish candlesticks. Each bullish candlestick has a close that is higher than its opening price and closes above the previous candle. They are typically either green or white on a chart.

Three white soldiers patterns aka three advancing soldiers patterns are three candlestick patterns found on stock charts. This pattern is considered to be a bullish reversal pattern. Watch our video above to learn more about how to trade them. 

They are is a simple pattern. When you see these patterns form on stock charts, be encouraged. Japanese candlesticks patterns are formed because of the constant fight between the bulls and the bears when trading stocks.

Without the fighting we wouldn't have anything to trade. In fact, charts are made up of candlesticks. Candlesticks alone tell us how traders felt about a particular stock on a particular day. Hence the importance of knowing what candlesticks mean.

Grouping candlesticks together gives you larger patterns but the individual candles give hints and warnings along the way. These warnings can inform you if a pattern ultimately breaks down.

1. Basics of Three White Soldiers Patterns

Three white soldiers patterns are made up of three consecutive bullish candlesticks. Each candlestick should open inside the previous day's candle as well as have a close that is higher than the day before.

The candlesticks in this pattern should either have no wicks or very small.

Since three white soldiers patterns are seen as a reversal pattern, this pattern usually means a strong change in the way traders feel about as security has occurred. The bears are too tired to continue the downtrend and the bulls come in to bat clean up.

The bulls push price higher for three days in a row. This in turn make the reversal a strong one. The stock has officially gone from a bearish one to a bullish stock.

The three white soldiers pattern is typically seen as more useful for long term traders because it takes three days to form. When this pattern forms it's a pretty reliable signal. It would be a great pattern to implement swing trading strategies or options trading strategies for beginners.


three white soldiers patterns

2. Technicals of Three White Soldiers Patterns

If you've been following our candlesticks courses and blog posts you know by know that patterns like thee white soldier patterns form within other patterns. It may seem like it's being repeated too much but it's so important.

Being able to see the big picture as well as the smaller ones will make you a more successful trader. Symmetrical triangle patterns as well as rising wedge patterns can affect a stock's outcome. You have to be able to see those patterns because they affect other patterns such as head and shoulders patterns.

Those patterns in turn affect the smaller candlesticks patterns like the three white soldiers patterns. They all work hand in hand. One pattern might mean one thing but a pattern meaning something different forms within it.

Hence the crucial importance of being able to read charts and find patterns like three white soldiers patterns. Take our candlestick reversals course.


three white soldiers patterns

PRAA had 2 three white soldiers patterns form. The first pattern formation caused a pretty long uptrend. It moved back down before occurring again. It hasn't at the conclusion of a strong downtrend the second time so the following moves weren't large ones.

How to Trade Three White Soldiers Patterns

  1. Knowing how to trade three white soldiers is quite simple: 
  2. Traders take a long position when price breaks above the high of the 3rd bullish candlestick.
  3. They use a candlestick close below the 2nd candlestick as a stop level.

1. Indicators

Technical analysis is an important part of trading. Different indicators like moving average lines and RSI can be an important part of technical analysis.

Without candlesticks none of those indicators would mean anything. Candlesticks not only tell a story but provide important support and resistance. That works in tandem with moving average lines. They provide support and resistance as well as equilibrium.

Traders use moving averages like the simple moving averages to keep a stock from going down too far or up too high. If price moves away from the moving average lines it's usually going to come back to them at some point.

RSI tells you when a stock is overbought or oversold. A stock getting into those overextended territories is going to correct. When trading the three white soldiers patterns stocks can get into overbought territory because of the strong push up.

When RSI is showing the stock is overextended a period of consolidation should take place. That doesn't mean the pattern has failed. It just means the stock needs to correct itself before moving up. That makes the new trend safer.

It's important to pay attention to moving averages and RSI along with candlesticks when trading. While they're not a crystal ball into the future they act as pretty good buy and sell signals.

We teach how to trade three white soldiers patterns on our live daily streams (bookmark our penny stocks list and stock watch lists pages, which are updated daily).

three white soliders patterns

The 200 SMA is an important indicator for AAL. The bears tried to break that key support level 4 different times. If the 200 SMA gets broken, i's' timber for the stock. The bulls refused to let that happen. The white soldiers formed and price changed direction before coming back to test and ultimately failing.

Final Thoughts

3 white soldiers patterns are bullish reversal patterns. The closer this pattern forms to the bottom of a downtrend, the stronger the reversal will be. This pattern tends to be pretty reliable as well.

As always be sure to look at the overall picture to see the larger patterns. Look at what the technicals are telling you. Trading smart allows you to be successful. Take our free online trading courses

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