Three Advancing White Soldiers candlestick pattern

In the terminology of the stock market literature, the pattern is sometimes referred to as the Three Advancing White Soldiers.

The Three Advancing White Soldiers (or Three White Soldiers) is a strong bullish reversal signal consisting of three consecutive bullish candlesticks. Each candlestick in the series closes at a higher price than the previous one forming higher highs and higher lows.

Considered as a reliable pattern and can be preceded by doji or hammer candlestick pattern.

The bullish counterpart to the Three White Soldiers pattern is the Three Black Crows pattern, which, unlike the white soldiers, triggers the bearish reversal with its three consecutive bearish candlesticks.

Construction

1st

• appears at downtrend
• long green body
• closing price should be higher than opening price

2nd

• long green body
• open price is higher than open price of 1st candlestick^①
• candlestick close price is above 1st candlestick up shadow^②

3rd

• long green body
• continues bullish trend
• open price higher than open price of 2st candlestick^③
• candlestick close price above 2st candlestick upper shadow^④

The 2nd and 3rd candlesticks should have similar body sizes. All three candles will have either short or nonexistent shadows.

However, be cautious when you observe excessively elongated candlesticks as they may indicate an overbought market and lead to the price pausing or the price fall as investors start selling.

You can сonfirm the signal with technical indicators such as the Stochastic Oscillator or the Relative Strength Index (RSI), as they can provide more insight into price trends.

The protective stop-loss order can be placed below the low of the first candlestick.