Hello dear readers, welcome! Nowadays, financial markets are evolving rapidly. To keep up with this, we need to be open to new information, analysis methods, and strategies every day. In this process, technical analysis has become an important tool for traders to understand price movements and predict trends in the market. Many people have realized the importance of Japanese candlesticks in technical analysis. Here, we’ll take a closer look at the "Three White Soldiers" candlestick pattern, known for its strong bullish signal.
 |
| Three White Soldiers candlestick pattern |
- Topic: Three White Soldiers
- Type: bullish
- Trend direction: reversal and continuation
- Opposite pattern: Three Black Crows
What is the Three White Soldiers Candlestick Pattern?
The Three White Soldiers is a candlestick pattern known as a strong bullish signal in technical analysis. It helps us notice when the market is shifting upward, whether it's the start of a new climb or the continuation of an existing one. This pattern is made up of three consecutive long green (or white) candles, each closing higher than the last, showing steady buying strength. It often forms after a downtrend, suggesting a change in direction, or appears within an existing uptrend, indicating that the rise may persist.
Candlestick traders favor this pattern because it shows a
clear change in market attitude, signaling that buyers are overtaking sellers. Whether you're new
to trading or already experienced, learning to identify the Three White
Soldiers can help you make better trading choices by spotting key bullish signs
on price charts.
Where Does the Name "Three White Soldiers" Come From?
The name "Three White Soldiers" is derived from a vivid metaphor rooted in the way markets move and react. The three green candlesticks symbolize three soldiers advancing in an orderly, consecutive manner, representing buyers overpowering sellers in a battle for price control. Each candle reflects a "victory" for the buyers, as prices rise consistently over three sessions. The term "white" comes from traditional candlestick charts, where bullish candles were historically depicted as white (though modern charts often use green). This imagery captures the essence of a decisive shift in market dynamics, making the pattern easy to visualize and remember.
Three White Soldiers Pattern Structure
The Three White Soldiers pattern is one of the commonly observed triple candlestick patterns on price charts. This candle formation consists of three consecutive rising (white/green) candlesticks, each having a closing price higher than the previous one.
The first candle (first soldier)
The first candle marks the beginning of bullish activity. When it appears after a downtrend, it suggests that the selling force is weakening and buyers are entering the market. If the trend is already upward, this candle serves as confirmation that the rise continues. The candle often has a long body and a small or no lower wick, indicating buyers were in charge from open to close. Its size and shape set the foundation for the following candles and help traders gauge the strength of the emerging trend.
The second candle (second soldier)
The second candle reinforces the movement initiated by the
first. It opens slightly above the close of the previous candle and continues
rising throughout the session. A long body with a small lower wick reflects
persistent buying activity, signaling that traders are confident and actively
pushing prices higher. The relationship between the first and second candles
confirms that the market is responding to bullish behavior and that the
uptrend has continuity.
The third candle (third soldier)
The third candle completes the pattern and strengthens the bullish signal. It closes above the second candle's close and usually features a long body with a minimal lower wick. Its appearance shows that buyers are maintaining control and that the upward movement is consistent. Observing the size and alignment of all three candles helps traders gauge the trend's reliability and choose wiser actions in the market.
All three candles in the Three White Soldiers pattern
usually share the same color and similar body length. In each
candle of this formation, the closing price is higher than the previous
candle's closing price.
How to Trade Three White Soldiers Pattern
The Three White Soldiers pattern is considered a strong
technical analysis signal that can indicate trend reversals. It often appears at the end of a downtrend and signals the beginning of an uptrend. From
the point where the pattern forms, it is anticipated that the uptrend may
continue. You can see an example of this on the 1-hour chart of the US
Dollar/Singapore Dollar:
 |
| Three White Soldiers pattern, trend reversal signal on USD/SGD. |
- Buy: To open a long position, we can wait for the formation to complete and then buy. The entry point can be placed just above or slightly above the closing price of the third white (green) candle.
- Stop Loss (SL): A stop loss level is typically placed just below the price at which the pattern formed, or slightly below a support level.
- Target: The profit target often relies on a resistance level or previous highs along the uptrend that emerges after the pattern formation. Additionally, each trader may utilize target-setting tools within their strategy framework, such as risk/reward ratios, moving averages, Fibonacci retracement levels, among others.
The Three White Soldiers candlestick pattern not only
appears at the end of a downtrend but also emerges in the middle of an uptrend,
indicating the continuation of the trend. For this reason, the Three White
Soldiers pattern is also recognized as a continuation formation. Here's an
example accordingly illustrated on the 4-hour chart of Euro/British Pound:
 |
| Three White Soldiers, bullish continuation signal on the EUR/GBP pair. |
If the Three White Soldiers candlestick pattern appears in a
strong downtrend, it can be misleading and only form a correction that is part
of the downtrend. A clear example of this is illustrated in the daily chart of
British Pound/US Dollar below:
 |
| Three White Soldiers, downtrend correction on the GBP/USD pair. |
Here's what should not be forgotten: When trading in the Forex market, you can always encounter risks. Any candlestick pattern can occasionally be misleading. Patterns like the "Three White Soldiers" should not be used as a standalone trading strategy. They should always be supported by other analytical tools.