Started by RoboForex, Apr 01, 2022, 06:22 am
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This article deals with a candlestick pattern called Three White Soldiers: what it looks like, what signals it gives, how it forms, what types it has, and, of course, how it can be used in trading.
Three White Soldiers is a reversal bullish candlestick pattern that predicts a change of a downtrend to an uptrend. This pattern can be encountered on price charts rather often.
When the Three White Soldiers pattern appears, it gives a signal to buy. The pattern has a bearish counterpart called Three Black Crows that was previously described in our blog.
The Three White Soldiers pattern consists of three white candlesticks with large bodies and almost no shadows. The pattern shows that the bulls have managed to capture the initiative and close trading sessions near the daily highs for three days in a row.
There are two more candlestick patterns that also consist of three white candlesticks and resemble Three White Soldiers. These are the Advance Block pattern and the Stalled pattern; however, instead of giving a signal to buy, they warn the trader of the ascending momentum coming to an end.
If the second and third candlesticks of the Three White Soldiers have small bodies and long upper shadows, the pattern is called Advanced Block. As the name of the pattern shows us, the advance of the bulls was blocked and the bears fight back.
The ascending impulse meets serious resistance, and it becomes extremely possible that the quotations will reverse downwards. This pattern is not good for buying because bulls turn out weak. If the trader has open buying positions, they should take the profit in them.
For the Stalled, a.k.a. Deliberation pattern, the picture is similar: the third candlestick is noticeably smaller than the first two. This means bulls are weak, the descending impulse is fading out, and a range or even a reversal might be coming.
The pattern informs the trader that now is not the best time for buying. The inability of the bulls to confidently open the third candlestick demonstrates that their initiative is weakening and further growth is doubtful, so one should avoid buying and close long positions.
The reversal candlestick Three White Soldiers pattern forms after a downward movement and predicts an upward reversal of the quotes. It can be traded on its own or alongside tech analysis instruments and indicators.
Before using the pattern for real, test it on a demo account. See more about candlestick patterns in our Blog.
Candlestick Analysis: 24 Main Candlestick Patterns
The post How to Trade Three White Soldiers Pattern appeared first at R Blog - RoboForex.
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