Three White Soldiers candlestick pattern is a special Japanese candle pattern. This is a good signal of the price at the beginning of a strong uptrend. Traders always pay attention to this 3 white soldiers candle pattern whenever it appears on the price chart.
In today’s article, I will give you a full overview of this pattern and how to use it in trading to have a higher winning rate.
Video on how to identify and use Three White Soldiers pattern
What is Three White Soldiers candlestick pattern?
In trading, 3 White Soldiers is the name for a Japanese candlestick pattern that reverses from falling to rising in price. This candlestick pattern often appears at the troughs of the market. It is a sharp bounce-back of prices after a long downtrend. This is a warning that the market will reverse and create an uptrend in the future.
Characteristics of the candlestick pattern
This normal candlestick pattern consists of 3 adjacent green candles satisfying 2 conditions as follows:
- The opening and closing prices of the following candles must be higher than the previous ones.
- The closing price of each candle must be close to the highest price (which means that the shadow of each candle is very small).
Types of Three White Soldiers candlestick patterns
On a Japanese candlestick chart, you can see different types of this pattern. As a signal, they all bring bullish signals in the future.
Where Three White Soldiers candlestick pattern appears
As mentioned at the beginning, the pattern usually appears at the intersection between a downtrend and an uptrend. This is a good signal for investors to open an UP order and do bottom fishing.
Or sometimes, this special signal may also appear when the price has already been in an uptrend. This represents the continuation of the uptrend.
How to trade Binary Option effectively with this pattern
Despite being a good signal of price reversals, experienced traders often combine this pattern with other indicators or signals to increase the safety of their orders. This is a good way to do bottom fishing if you know how to match them correctly.
Notes: The pattern is a bullish reversal signal. So this is a signal for you to open an UP order.
Combine with support/resistance zones
Let’s take a look at a popular combination of this candlestick pattern. It’s to use the Three White Soldiers candlestick pattern with Resistance and Support. In this trading strategy, levels act as special price zones. When the pattern appears in these zones, the probability of price increase will be very high.
Conditions: A 5-minute Japanese candlestick chart. Resistance/Support zones. Open orders with an expiration time of 15 minutes or above.
Trading formula:
+ Regarding Support zone: Open an UP order when the price falls into the Support zone, forming a Three White Soldiers candlestick pattern.
+ Regarding Resistance zone: Open an UP order when the price breaks out of the Resistance zone with a Three White Soldiers candlestick pattern. At that time, the Resistance zone becomes a Support zone.
Three White Soldiers is a highly accurate bullish candlestick pattern. The bigger the candles in the pattern are, the higher the accuracy becomes. You can use it to predict the market bottom.
Check out how to trade binary options with this special price signal on your DEMO account.
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The post What Is Three White Soldiers Candlestick Pattern? Meaning And How To Use appeared first on How To Trade Blog.
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