Three white soldiers, as the name suggests is a three candle pattern and belongs to the bullish reversal family. Often called as three advancing soldiers,  due to the fact that  it signifies the end of a downtrend and marks a  clear indication in the balance shift from sellers to buyers.

How do you spot a three white soldiers pattern?
Spotting this pattern is easy! You can do it in four easy steps

  1. The very first thing you need to make sure  is that a short term downtrend is in progress.
  2. Next, this downtrend must be followed by a trend reversal,  three  green candles, each with a higher close, this is the formation of three white soldiers.
  3. Now, if you’ve spotted three candles,  make sure each of these candles  closes at or near its highs. You can do this by  checking the price closes in the top 30% of the day's rang for that day.
  4. Although not a rule, each subsequent candle should open within the previous session’s real body. An open at or a little higher than the previous session’s real body is also valid.
Candlestick Patterns are now on Market Pulse. Get them with Pro/Pro+ Plan

What’s happening in the market? How does this pattern form?

Three White Soldiers represents a  trend reversal, after a sharp downtrend or at a low price area.Its successive higher highs and higher lows are indicative of a bullish market ahead.

What action to  take in case of Three White Soldiers?

In case you’ve spotted a Bullish reversal in Three White Soldiers, go ahead and buy a third white candle. Ideally you should put a sell-stop below the lowest low of the last three candles.