Definition
Bullish Three White Soldiers formation signals a strong trend reversal. It consists of three long white candles forming a stair. The opening prices are slightly lower than the previous day’s closing price.
- Trend: Reversal
- Expected trend: Bullish
- Previous trend: Bearish
- Reliability: High
- Type: Bullish
- Number: 3
Recognition
- The market is in a downward trend.
- There are three consecutive long white candles.
- All candles close higher than the previous one.
- The opening prices are always in the body of the previous candle.
- Every white candles closes above the prevoiuos day’s body.
Interpretation
When this pattern appears in an inclining trend, a reversal can be expected. The opening prices are always in the body of the previous candle, but the closing prices are always higher than on the previous day. The share closes near the daily maximum price.
Important factors
The opening price of the second and third day can be located anywhere in the previous candle’s body. The reliability is higher if the opening price is above the middle of the previous day’s body. If the white candles have long body, traders should watch out for overbought markets. The formation is highly reliable, but a confirmation is necessary (may come from a white candle with higher closing price or gap).
