Is there a more bullish sounding name than three white soldiers? Now, with modern charting packages, you can make your soldiers whatever color you want, but the point is that the real body is hollow, thus taking on the background color of your chart. With the price opening lower and ending higher, it demonstrative of the control that buyers have over the price.
Three White Soldier Basics
As you study this pattern, the bullish inclination is very clear. The ability of price to form higher highs and lows on consecutive days. The ability of the price to close higher than the open is a clearly bullish. The real question is how you trade a pattern that has already moved significantly. The most important point is that it is occurring at the end of a downtrend. That means that if you’re trading the pattern, you’re likely looking for a more significant reversal and likely playing the ensuing trend.
Overall Rating: 3 Star
Directional Bias: Bullish Reversal
Number of Candles: 3
Frequency Rating: 2 Star
Pattern Description:
This soldier pattern occurs at the end of a downtrend. The pattern contains three consecutive open candles where the price moved higher while closing higher than the open.
Volume Description:
Falling volume during the formation of a three white soldier pattern with higher volume on the breakout increases performance.
Statistical Notes:
Taller soldier patterns with long bodies occurring in a neutral or bullish primary trend increase performance.
Measuring Technique:
Add one-third of the height of the pattern to the close of the third candle.
Conclusion
Many candle patterns provide minor indications of support and resistance and are good for trading with the trend. Three white soldiers are a more significant pattern that is identifying a trend change. As a result, the pattern is rarer, requires you to trade a larger move and is less frequent.
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