Three White Soldiers Pattern

The three white soldiers pattern is a reversal pattern that predicts a change in the direction of a trend. The pattern has three consecutive candles, which will make them less frequent than some other candlestick patterns.

Learn more about this pattern, how to spot it, and what actions to take here in detail.

What is the Three White Soldiers Candle Pattern?

The three white soldiers candlestick pattern is used to estimate the reversal of the current downtrend on the pricing charts. The pattern has three consecutive long-bodied candlesticks that open within the older candle's real body and close to the point where it crosses the previous candle's height. 

These candlesticks do not need very long shadows and are ideally open within the real body of the preceding candle in the same pattern.

How to Spot a Three White Soldiers Pattern

The Three White Soldiers Pattern is bullish and reversal in nature. It occurs in the event of a strong downtrend and an estimated change in direction. The formation will have three consecutive bullish candles, and each will close higher than the previous candle.

Since it will have three candles, the pattern will almost confirm that a reversal is taking place, thanks to the bullish force behind the creation of this pattern. 

What Does the Three White Soldiers Candlestick Pattern Indicate?

The three white soldiers candlestick pattern is usually seen as a reversal indicator, and it often appears after a period of price fall. This chart pattern suggests a strong move in market sentiments in terms of the stock or commodity, making up the price action on the chart. 

When a bullish candle closes with a small or no shadow, it indicates that the bulls have kept the price at the top of the range for the session. 

The bulls take over the rally in all such sessions and close near the high of the day for three consecutive sessions. In addition, the pattern is preceded by other candlestick patterns, suggesting a reversal. 

Importance of Colour in the Three White Soldiers Pattern

The colour of this pattern is crucial, as it indicates the strength of the bullish momentum in the market. Every candlestick will represent a bullish candle, which means the closing price is greater than the opening price. 

The colour of the candlesticks is either white or green, based on the charting software used. 

The colour of the three white soldiers candlestick pattern does not impact the interpretation of the pattern itself. Some traders, however, choose to use a green colour to show the bullish candles, as it is a more intuitive colour to indicate bullishness. 

Limitations of Three White Soldiers Pattern

Three white troops occasionally emerge during consolidation, which is an easy way to get caught up in the process. One should also check to see if the volume supports the creation of three white troops.

To overcome the drawbacks of visual patterns, traders can combine the three white soldiers candlestick pattern with additional technical indicators like trendlines, moving averages, and Bollinger bands.

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