Three white soldiers patterns are bullish. Where do they get their name from? The Japanese originally called them the Three Red Soldiers, but in the Western world, we used white candles, so we called them the Three White Soldiers. For a while, during World War II, they were often called the Three Marching Soldiers. What color or name this pattern has is not so important, but it is important that you can remember it when you see it on the chart.
These patterns are a three-candlestick pattern that takes place near support levels. All three candlesticks are bullish and are either green or white on stock charts. The second bullish candlestick closes above the first. Then, the third candlestick closes above the 2nd. Look for possible continuation if the price breaks above the third candle and holds.
What Is a Three White Soldiers Pattern?
Three white soldiers patterns are made up of all bullish candlesticks. Each bullish candlestick has a close 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, also known as three advancing soldiers patterns, are candlestick patterns on stock charts. This pattern is considered to be a bullish reversal pattern.
Three white soldiers patterns are made up of three consecutive bullish candlesticks. Each candlestick should open within the previous day’s candle and have a higher close than the previous day’s close.
Basics
The candlesticks in this pattern should either have no wicks or be small.
Since three white soldiers’ patterns are seen as a reversal pattern, this pattern typically indicates a significant shift in traders’ sentiment towards the security. The bears are too tired to continue the downtrend, and the bulls come in to bat clean up.
The bulls push prices higher for three consecutive days. This, in turn, makes the reversal a strong one. The stock has officially transitioned from a bearish to a bullish market.
The three-white soldier pattern is typically seen as more useful for long-term traders because it takes three days to form. When this pattern forms, it is a reliable signal. However, like every pattern, it can fail at any moment. Therefore, waiting for confirmation and pairing the information the chart tells you to create the best game plan for the situation is always important.
Three White Soldiers Pattern Trading Strategy
- Go long when the price breaks above the high of the 3rd bullish candlestick.
- Use a candlestick close below the 2nd candlestick as a stop level.
Utilize proper risk management techniques when trading a Three White Soldiers pattern.
