What Is Three White Soldiers Candlestick Pattern?
Three white soldiers is one bullish candlestick pattern used to forecast the reversal of a price chart's current decline. The pattern consists of three consecutive candlesticks with long bodies that open within the previous candle's genuine body and close above the previous candle's peak. These candlesticks should not have long shadows and should preferably be open within the body of the preceding candle in the design.
Images provided are not current and any securities are shown for illustrative purposes only.
What Do Three White Soldiers Say?
The three white soldiers candlestick pattern indicates a significant shift in market sentiment regarding the stock, commodity, or currency pair whose price action is depicted on the chart. When a candle closes with tiny or no shadows, it indicates that the bulls have maintained control of the session's price range. The bulls dominate the rally throughout the session and close near the high for three straight sessions. In addition, the pattern may be preceded by other reversal-suggesting candlestick patterns, such as a doji.
What Sets Three White Soldiers Different from Three Black Crows?
The three black crows candlestick pattern is the reverse of the three white soldiers candlestick pattern. Three black crows consist of three consecutive long-bodied candlesticks that opened within the actual body of the preceding candle and closed below the preceding candle. Three white soldiers portray the bears losing ground to the bulls, but three black crows show the bears regaining control from the bulls. These patterns are subject to the same volume and extra confirmation restrictions.
Limitations of Using Three White Soldiers
During moments of consolidation, three white soldiers can also appear, which is an easy way to get caught in a continuance of the current trend rather than a reversal. The volume supporting the development of three white soldiers is one of the most important considerations. Any pattern on low volume is questionable since it represents the market behavior of a minority, not the majority.
Traders employ the three white soldiers and other similar candlestick patterns in conjunction with other technical indicators such as trendlines, moving averages, and bands to overcome the limitations of visual patterns. Before opening a long position, for instance, traders may check for regions of forthcoming resistance or examine the volume on the breakout to confirm that there was a large dollar volume of trading. If the pattern happens with little volume and near-term resistance, traders may wait for additional confirmation before initiating a long position.
Technical analysis with moomoo
Moomoo stock trading app provides free advanced stock charting tools to help various investors to analyze trends and patterns with 60+ technical indicators and add visuals to charts using 38+ drawing tools. Sign up and download the moomoo app today to access these charting tools!