Three White Soldiers
Tue, Apr 15The Three White Soldiers is a bullish Japanese candlestick reversal pattern characterized by three consecutive white bodies, each closing at a higher price. This pattern ascends like a staircase, indicating a steady climb in price.
Typically, it signifies a weakening of an established downtrend and the potential onset of an uptrend. Each candle should open within the body of the previous one, with the close positioned near the candle's high.
To identify the Three White Soldiers pattern, look for the following criteria:
- There must be three long and bullish (white or green) candlesticks in succession.
- Each candle should open above the previous day's opening price, ideally in the middle price range of the prior day.
- Each subsequent candle must open progressively higher, establishing a new short-term high.
- The candles should have very small or nonexistent upper shadows/wicks.
The Three White Soldiers pattern typically emerges after a downtrend. It indicates that the bears are losing strength, allowing the bulls to drive the price upward over three trading sessions, resulting in a strong reversal.
This upward movement reflects the bulls' strength, shifting market sentiment from bearish to bullish. It is important to pay attention to the lengths of the candles; the second and third candles should be roughly the same size as the first to confirm that the bulls are in control.
If the third candle is smaller or shorter than the first two, it may be wise to question the validity of the Three White Soldiers pattern. A change in size can diminish the reliability of the pattern.
A significant drawback of the Three White Soldiers pattern is its potential occurrence during a consolidation phase, which can create mixed sentiment and lead to being trapped on the wrong side of the market.
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