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A trader’s guide to the three white soldiers candlestick pattern

The bullish three white soldiers chart pattern can be helpful in determining a price reversal following a downtrend. Learn more about this candlestick pattern and how you can trade when you recognise it.

What is the three white soldiers pattern?

The three white soldiers pattern is a bullish candlestick formation on a trading chart that occurs at the bottom of a downtrend. As the name suggests, the pattern consists of three candles, which are green in colour. Traders believe that this formation signals an upcoming price reversal because of the strong buying pressure.

The reverse of the three white soldiers is called the three black crows. This pattern is represented by three consecutive red candlesticks that occur at the top of an uptrend.

How to identify the three white soldiers pattern

To identify the three white soldiers pattern, look for three consecutive green or white candlesticks. Each must open and close progressively higher than the first. The candlesticks should have big bodies and very small (or no) wicks. As mentioned, you are likely to see the pattern at the bottom of a downtrend.

Three advancing white soldiers example

Say you’re following the GBP/USD price, which opens the trading day at $1.23723. As buyers and sellers enter the market, the price starts moving. It hits a low of $1.23657 but buyers are putting a lot of pressure on the market and the pair hits a high of $1.24293 before closing at $1.24211.

The next trading day, the bulls continue to push the price up, and it reaches a high of $1.24958 before closing at $1.24873. This trend continues on the third trading day, with buyers managing to get the GBP/USD price up to $1.25494 before it closes at $1.25388. These upward moves over the trading period create the three white soldiers candlestick pattern, as pictured below.

Learn how to trade GBP/USD

What do the three white soldiers mean?

The three white soldiers mean that there is a steady advance of buying pressure following a downtrend. Bullish patterns like these often signal a reversal of price movement. Some traders consider opening a long position to profit from any upward trajectory when they see the three white soldiers pattern.

How to trade when you see the three white soldiers pattern

There are a number of ways to trade when you see the three white soldiers pattern. First, confirm the signal using appropriate technical indicators such as the stochastic oscillator or the relative strength index (RSI). This can help to validate what the candlesticks are signalling, because indicators can provide more insight into price trends.

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 (buy).

Learn more about technical analysis

Follow these steps to trade when you see the three white soldiers chart pattern:

  1. Create an IG trading account or log in to your existing account
  2. Type in the name of the asset you want to trade in the search bar
  3. Enter your position size
  4. Select ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

You can practise trading using the three white soldiers pattern with an IG demo account. You’ll be able to build your confidence on the financial markets in a risk-free environment with $10,000 in virtual funds.

Three white soldiers summed up

  • The three white soldiers pattern is a bullish candlestick formation that consists of three green or white candles that each close progressively higher than the first
  • You are likely to see the pattern at the bottom of a downtrend
  • The three white soldiers mean that there is a steady advance of buying pressure, which could be translated as an upcoming price reversal

Start trading on a live account or create a demo account today.

Publication date : 2020-02-18T10:39:51+0000

This information has been prepared by IG, a trading name of IG US LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. Any research provided should be considered as promotional and was prepared in accordance with CFTC 1.71 and designed to promote the independence of investment research. See our Summary Conflicts Policy, available on our website.

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