The Three White Soldiers pattern is formed when three long bullish candles follow a DOWNTREND, signaling a reversal has occurred.
We consider this type of triple candlestick pattern as one of the most potent in-yo-face bullish signals, especially when it occurs after an extended downtrend and a short period of consolidation.
The first of the “three soldiers” is called the reversal candle. It either ends the downtrend or implies that the period of consolidation that followed the downtrend is over.
For the Three White Soldiers pattern to be valid, the second candlestick should be bigger than the previous candle’s body.
Also, the second candlestick should close near its high, leaving a small or non-existent upper wick.
For the Three White Soldiers pattern to be completed, the last candlestick should be at least the same size as the second candle and have a small or no shadow.
The Three Black Crows candlestick pattern is just the opposite of the Three White Soldiers.
It is formed when three bearish candles follow a strong UPTREND, showing that a reversal is in the works.
The second candle’s body should be bigger than the first candle and should close at or very near its low.
Finally, the third candle should be the same size or larger than the second candle’s body with a very short or no lower shadow.
For the Three Black Crows pattern to be completed, the last candlestick should be at least the same size as the second candle and have a small or no shadow.
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