What is Three White Soldiers ? 

Three white soldiers is a bullish candlestick pattern which is used to forecast the reversal of the existing downtrend in a pricing chart. The pattern includes 3 straight long-bodied candlesticks that open within the previous candle's real body and a close that exceeds the previous candle's high. These candlesticks should not have very long shadows and preferably open within the real body of the preceding candle in the pattern.


KEY TAKEAWAYS ⚡️🔑🔑

1. Three white soldiers are considered a reliable reversal pattern when confirmed by other technical indicators like the relative strength index (RSI).

2. The size of the candles and the length of the shadow is used to judge whether there is a risk of retracement.

3. The opposite pattern of three white soldiers is three black crows, which indicates a reversal of an uptrend

What do "Three White Soldiers" tell you?

The three white soldiers candlestick pattern informs a trader about a strong change in market sentiment for any currency pair making up the price action on the chart. 

When a candlestick is closing with small or no shadows, it suggests that the bulls have managed to keep the price at the top of the range for the session. 

Basically, the bulls take over the rally all session and close near the high of the day for three straight sessions. Plus, the pattern may be preceded by other candlestick patterns suggestive of a reversal, such as a doji.

How to Trade When "Three White Soldiers" Pattern appears?

As three white soldiers is a bullish visual pattern, it is used as an entry or exit point. Traders who are short on the security look to exit and traders who are waiting to take up a bullish position see the three white soldiers as an entry opportunity.

There are various approaches to trade when you see the Three White Soldiers pattern. Initially, affirm the sign utilizing proper specialized pointers, for example, the stochastic oscillator or the relative quality file (RSI). This can assist with approving what the candles are flagging, since indicators can give more understanding into price trends.

When trading the three white soldiers pattern, it's important to note that the strong moves higher could create temporary overbought conditions. The relative strength index (RSI), for example, may have moved above 70.0 levels. In some cases, there is a short period of consolidation following the three soldiers pattern, but the short- and intermediate-term bias remains bullish. The significant move higher could also reach key resistance levels where the stock could experience consolidation before continuing to move higher.

For example, if you see three white soldiers at the bottom of a downtrend and you think a reversal is coming, you can test the signal using the RSI. This indicator can help you to predict price trends because it tracks the speed and momentum of the market. If the reversal is confirmed, you may want to open a long position i.e. buying position.