The three white soldiers pattern is a powerful and visually distinct candlestick formation that traders use to identify potential bullish momentum in financial markets. While relatively rare, its appearance often signals strong buyer conviction—especially after a prolonged downtrend. In this comprehensive guide, we’ll explore what the three white soldiers pattern is, how it forms, what it reveals about market sentiment, and most importantly, how you can trade it effectively.
Whether you're analyzing stocks, cryptocurrencies, or commodities, understanding this pattern can significantly improve your timing and decision-making in bullish market conditions.
What Is the Three White Soldiers Pattern?
Also known as the three advancing white soldiers, this candlestick pattern consists of three consecutive long green (or white) candles that appear during or after a downtrend. Each candle opens within or near the body of the previous one and closes progressively higher, indicating sustained buying pressure.
This formation typically emerges after a bearish trend, suggesting that bears are losing control and bulls are taking over. Unlike reversal patterns such as the hammer or morning star, the three white soldiers are often interpreted as a continuation signal, pointing to further upside momentum rather than just a bottoming out.
👉 Discover how market trends reveal themselves before price moves—click here to learn more.
Key Characteristics of the Pattern
For a valid three white soldiers setup, the following conditions should ideally be met:
- All three candles are bullish (green/white), with minimal or no upper wicks.
- Each candle opens within or slightly above the previous candle’s real body.
- Each subsequent candle closes higher than the last, showing increasing strength.
- The third candle should not be significantly smaller than the second—if it is, the signal weakens.
This pattern reflects a psychological shift: sellers are exhausted, and buyers are stepping in with growing confidence. When confirmed on higher timeframes like daily or weekly charts, its reliability increases substantially.
How Does the Three White Soldiers Pattern Form?
The formation of this pattern illustrates a gradual but decisive shift in market sentiment:
- First Candle: After a downtrend, the first strong green candle appears—often triggered by positive news or short-covering. It breaks recent resistance and catches traders’ attention.
- Second Candle: The second candle opens near the close of the first and pushes even higher. This shows sustained demand and indicates that bulls are in control.
- Third Candle: Ideally longer than the second, it confirms strong continuation. A close near its high suggests aggressive buying.
If the third candle is small or has a long upper wick, it may indicate profit-taking or resistance forming—potentially weakening the bullish outlook.
While commonly seen on daily charts, the three white soldiers can appear across all timeframes—from hourly to monthly—making it versatile for both day traders and long-term investors.
What Does This Pattern Tell You About Market Sentiment?
At its core, the three white soldiers pattern tells you that buyers have overwhelmed sellers and that momentum is shifting decisively upward. On longer timeframes, this often correlates with institutional accumulation or a fundamental shift in market perception.
For example:
- In cryptocurrency markets, seeing this pattern after a prolonged bear market could signal renewed investor confidence.
- In equities, it might reflect strong earnings results or macroeconomic optimism.
Even if a small red (bearish) candle follows the third soldier, it doesn’t necessarily invalidate the signal. Such pullbacks are common after strong rallies and may present buying opportunities rather than reversal warnings.
However, always consider volume: high trading volume during these candles strengthens the validity of the move. Low volume raises concerns about a potential "bull trap."
How to Trade the Three White Soldiers Pattern
Successfully trading this pattern involves confirmation, risk management, and strategic entry planning. Here are three proven approaches:
1. Enter After the Third Candle Closes
The most straightforward method is to initiate a long position once the third candle has fully closed. This avoids premature entries and confirms that the pattern has formed.
Set your stop-loss below the low of the first candle to protect against sudden reversals. Take-profit levels can be based on recent resistance zones or Fibonacci extensions.
👉 Master the art of timing your entries—click here to unlock advanced trading strategies.
2. Use Pending Buy-Stop Orders
To avoid missing fast-moving breakouts, place a buy-stop order above the high of the third candle. This ensures entry only if upward momentum continues.
For instance:
- If Bitcoin completes three white soldiers with a high at $68,000, placing a buy-stop at $68,500 confirms breakout strength.
- This method works well in volatile markets where prices can gap up quickly.
3. Combine with Technical Indicators
Enhance accuracy by combining the pattern with technical tools:
- Relative Strength Index (RSI): If RSI is rising from below 50 (not overbought), it supports ongoing bullish momentum.
- Moving Averages: A price staying above key moving averages (e.g., 50-day or 200-day MA) reinforces trend strength.
- Volume Indicators: Rising volume across the three candles adds credibility.
Using confluence—multiple indicators aligning—dramatically improves trade success rates.
Three White Soldiers vs. Three Black Crows
These two patterns are mirror images:
| Feature | Three White Soldiers | Three Black Crows |
|---|---|---|
| Trend Context | Bullish continuation after downtrend | Bearish continuation after uptrend |
| Candle Color | Three consecutive green/white candles | Three consecutive red/black candles |
| Market Sentiment | Buyers dominate | Sellers dominate |
While structurally similar, their implications are opposite. Traders use both to anticipate extended moves but in different directions.
Benefits and Limitations of the Pattern
Advantages
- Easy to identify visually on price charts.
- Applicable across all asset classes and timeframes.
- Often precedes strong upward moves when confirmed properly.
Drawbacks
- Relatively rare, so opportunities are limited.
- Can produce false signals, especially in choppy or low-volume markets.
- Requires confirmation—never trade it in isolation.
Frequently Asked Questions (FAQ)
Q: Can the three white soldiers appear in cryptocurrency markets?
A: Yes, absolutely. It’s especially effective in crypto due to high volatility and strong trend behavior. For example, Bitcoin has shown this pattern ahead of major rallies.
Q: What if the third candle has a long upper wick?
A: A long wick suggests rejection at higher levels and weakens the signal. It may indicate hesitation among buyers—proceed with caution or wait for further confirmation.
Q: Should I always trade this pattern when I see it?
A: No. Always assess context—trend direction, volume, broader market conditions—and combine with other indicators before entering.
Q: Is this pattern more reliable on certain timeframes?
A: Yes. Daily and weekly charts provide stronger signals than intraday timeframes due to reduced noise and greater participation from institutional traders.
Q: Can gaps between candles affect the pattern’s validity?
A: Small gaps aren’t disqualifying. In fact, gap-ups between candles can enhance bullish conviction—but large gaps may indicate overextension.
👉 See how real-time data helps spot patterns faster—click here to explore live charting tools.
Final Thoughts
The three white soldiers pattern is more than just an aesthetic arrangement of candles—it's a psychological footprint left by market participants shifting from fear to greed. When properly identified and confirmed, it offers traders a compelling edge in capturing early-stage bullish trends.
But remember: no single pattern guarantees success. Always apply proper risk management, confirm signals with volume and indicators, and stay aligned with the broader market structure.
By integrating tools like RSI, moving averages, and smart order execution (such as pending buy-stops), you turn a simple visual cue into a robust trading strategy—one that stands the test of real-world market dynamics.