For a better understanding of this article, you should already know what Japanese Candlesticks are and all their features; for this reason, we suggest you to read this introductory article to Japanese Candlesticks: Japanese Candlestick Chart ( So that you can understand also the Ratings given to the Candlestick Patterns for the “quality” of the signal and for their frequency to “appear” on Charts).
Let’s analyse now the following Candlestick Pattern: “Three White Soldiers”.
Three White Soldiers
– Normally it should be a signal of Bullish reversal of the current Trend (If it occurs during a Downtrend); whereas it should be a signal of continuation of the current Trend if it occurs during an Uptrend.
– The Pattern is characterized by Three white consecutive candles, each with a higher High; the Open of the Second and Third Candle are within the Real Body of the Previous Candle.
– The Real Bodies of the Candles have the same length (More or less); better if the Real Body of each Candle is longer than the Real Body of the Previous Candle.
– Normally the Open of the Second and Third Candle are below the Close of the Previous Candle (Or at the same level).
– The Highs are gradually higher, whereas the Close of the Candles should be above the High of the Previous Candle.
– In case that the first Candle after the Pattern is a black Long Line that makes an “Engulfing Pattern”, it is a strong signal of Bearish Reversal.