What is the Three White Soldiers Pattern?
Quick Answer: Three White Soldiers is a bullish candlestick formation with three strong green candles that close progressively higher, hinting at trend reversal or continuation.
Understanding the Three White Soldiers Pattern
Three White Soldiers features three strong bullish candles closing near their highs, usually after a downtrend. It indicates sustained buying pressure.
Validating the Signal
Ensure each candle opens within the prior body, showing continuity. Increased volume and breakouts above nearby resistance levels strengthen the pattern.
Strategy Idea
Use the pattern to enter trend reversals, targeting prior swing highs. Tighten stops below the second candle's low to manage risk.
Beware of Exhaustion
Three White Soldiers after an extended rally may signal blow-off rather than fresh trend. Cross-check with volume and momentum to avoid chasing overheated moves.
Overextension Risk
If the pattern forms into major resistance, consider scaling out or waiting for a pullback before adding exposure.
Related Terms
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