Three White Soldiers Pattern
By: Stephanie
The player will show in this paragraph
Three White Soldiers Japanese Candlestick Pattern
In a downtrend, three long white days occur with consecutively higher closes. Generally the Three White Soldiers signal suggests future market fortitude, as a reversal is in progress that is building on moderate upward steps.
This is one of the more powerful secondary signals. The reason it is considered a secondary signal is because it doesn't occur as often as the major signals. However, it is always worthwhile knowing all the signals, even those that occur less often, because they can be used as supporting evidence of market trend and sentiment. In addition, secondary and other minor signals may offer opportunities that would otherwise be missed.
Three White Soldiers is a three candle bullish reversal formation and is the opposite of Three Black Crows.
This pattern occurs in a downtrend where three consecutive white bodies occur in sequence, each with a higher close.
Each should open within the previous body and the close should be near the high of the day.
Rules to identify the Three White Soldiers pattern:
- The downward trend has been fairly consistent for a good period of time.
- The first candle is in the opposite direction of the trend (a white candle).
- The second and third candlesticks are white and open in the previous day's body.
- Each day should close very near its high for the day.
- The opens should be within the top half of the previous day's body.
Potential Signal Strengtheners:
- The longer the candles, the more dramatic the reversal.
- The higher a candle opens compared to the prior candle, the stronger the chance of a continued reversal.
General Analysis and Investor Sentiment:
After a downtrend or a flat period, this pattern suggests an uptrend rally will occur. The strength of this formation consists of the fact that each day, the lower open suggests that the Bears are still present. By the end of each day, the Bulls have overcome the early period Bears. This indicates that a continued rally has selling occurring as it is happening. If there is large trade volume during this period, it is likely that positions are changing hands and a continued rise should be seen, especially in an oversold market.
Thats it for the Three White Soldiers Japanese Candlestick Pattern. Keep learning and mastering Forex with us, here at PipsAngels.com. See you soon!
