The three white soldiers candlestick pattern is one of the bullish reversal candlestick patterns. This pattern usually appears at the end of the downtrend. After forming this pattern, the existing downtrend reverses, and new uptrend starts.
This pattern is formed of three green candles. All three candles should have long bodies with minimum wicks. The candle two and three open within the real body of the previous candles.
When the market comes back to the support level (pullback) in an uptrend, the buyers suddenly entered the market and a long green body candle is formed. If buyers are strong enough, they make second and third long green candles. This is an indication that the buyers have taken control of the market and they are ready to take the price higher.
How to trade three white soldiers candlestick patterns?
It is highly recommended that you should wait for the pullback in an uptrend. We use 200 EMA to determine the uptrend. When the price is trading above 200 EMA, it is considered an uptrend.
1.. The price should be trading above 200 EMA.
2. Wait for the price to come to the support level. The support level could be horizontal line support, trendline support, or dynamic support like 200 EMA or 50 EMA.
3. Find three successive white candles having long bodies. The opening of the second and third candles should be within the body of the previous candle.
4. Buy above the high of the third green candle. The stop loss can be placed below the swing low. Please note that the stop loss may be huge in this pattern so try to manage your lots accordingly.
5. Book the profit at the next resistance level.
6. Here is the real chart example.
Important points to remember
- The price should be trading above 200 EMA.
- Wait for the price to come to the support level.
- Wait for the three successive long green body candles to be formed.
- The opening of the second and third candles should be within the body of the previous candles.
- Buy above the high of the third green candle.
- Put the stop loss below the swing low.
- The stop loss may be huge in this pattern so manage your lots accordingly.
- The profit can be booked at the next resistance level.
FAQ – Three white soldiers candlestick patterns
Q1. What is three white soldiers?
Three white soldiers is the bullish reversal candlestick pattern. It is formed of three successive white candles. This pattern usually appears at the support level. After forming this pattern, fresh buyers enter the market and take the price higher.
Q2. Where to enter on three white soldiers?
The buy order can be placed above the high of the third green candle. The stop loss should be below the swing low. Please note that the stop loss may be huge in this pattern due to the size of the green candles so manage your lot size accordingly in the forex market.