Candlestick patterns tell stories about market psychology—stories of fear, greed, hope, and regret playing out in real-time. Among these patterns, the Three White Soldiers stands out as one of the most powerful bullish reversal signals. When this pattern appears after a downtrend, it often marks the moment when sellers exhaust themselves and buyers seize control with conviction.
Unlike many candlestick formations that can be ambiguous or subjective, Three White Soldiers follows clear, specific rules. Three consecutive long bullish candles, each opening within the previous candle's body and closing near its high, with minimal upper wicks. This structure reveals sustained buying pressure across three sessions—buyers who keep pushing higher without giving back gains.
But here's the reality: like any technical pattern, Three White Soldiers isn't magic. It doesn't guarantee reversals or predict the future. What it does do is identify moments when market dynamics shift from bearish to bullish with unusual strength. Traders who understand both the pattern's power and its limitations can use it to time entries, manage risk, and capture upside moves.
Anatomy of the Three White Soldiers Pattern
Let's break down exactly what this pattern looks like and why each component matters:
The Three Candles
First White Soldier: This candle initiates the potential reversal. After a downtrend, price suddenly rallies strongly—typically a bullish candle with a small or non-existent lower wick (showing sellers couldn't push price down) and a small upper wick (showing buyers didn't encounter much resistance). The body should be meaningfully sized, not a tiny doji. This first candle represents the initial shift—buyers stepping in aggressively after a period of selling.
Second White Soldier: This candle confirms the reversal intent. It opens within the body of the first candle (ideally above the prior close but can be anywhere in the body) and rallies again, closing near its high. Crucially, it opens higher than the first candle opened, showing that buyers remain in control even after the prior day's gains. The second candle should be similar in body size to the first—not significantly smaller, which would indicate weakening momentum.
Third White Soldier: The final piece cements the pattern. Like the second, it opens within the second candle's body and closes near its high. Again, the opening price is higher than the prior day's open, and the body remains substantial. By this point, the pattern is unmistakable: three consecutive days where buyers consistently outpaced sellers, each day building on the last.
Visual Characteristics
The absence of long upper wicks matters. When a candle has a long upper wick, it shows price tried to go higher but got rejected—sellers pushed back down. Three White Soldiers should have minimal upper wicks, meaning price generally closed near the session high. This indicates that buyers maintained control throughout each session rather than losing steam as the day progressed.
Lower wicks should also be small or non-existent. If candles have long lower wicks, it means intraday dips occurred before buyers stepped in. While not ideal, small lower wicks are acceptable—but the pattern is stronger when they're minimal, showing that sellers couldn't even push price down intraday.
The three candles should be roughly comparable in size. If the first candle is huge and the next two are tiny dojis, that's not Three White Soldiers—that's momentum exhaustion. Conversely, if the candles get progressively larger, that's actually a stronger variation showing accelerating momentum. The textbook pattern shows three similarly-sized bullish candles, but real markets rarely look perfect.
Volume Confirmation
Volume should ideally expand across the three candles, particularly on the first candle as it breaks the downtrend. Rising volume confirms that the reversal is attracting genuine participation, not just low-volume short covering. However, don't reject a pattern solely because volume didn't increase perfectly—sometimes strong moves unfold on average volume with concentrated buying at key levels.
The most important volume consideration is this: the three candles shouldn't form on abnormally low volume. If you see Three White Soldiers forming at 50% of average volume, treat it with skepticism. That's likely a short squeeze or thin liquidity, not a sustainable reversal.
Market Psychology Behind the Pattern
Three White Soldiers tells a specific psychological story:
Before the pattern: Sellers have controlled the market. Price has been declining, each drop reinforcing bearish sentiment. Shorts feel confident, longs are stopped out or demoralized. The downtrend feels entrenched.
First candle: Sellers try to push price down again, but buyers absorb the selling. Then buyers start pushing up. Shorts get nervous—this isn't following the script. Some cover, creating additional buying pressure. Price closes strong. The first crack in the bearish thesis appears.
Second candle: The previous session's strength creates hesitation. Shorts worry about more upside; longs see potential reversal. Price opens higher, but sellers still try to defend their positions. Buyers remain persistent, pushing through resistance and closing near the high again. More shorts cover, more momentum traders jump in. The psychological grip weakens further.
Third candle: By now, the message is clear—sellers are losing, buyers are committed. Shorts who haven't covered are sweating. New buyers see the trend change and want in. Price opens higher yet again, and though sellers attempt one last defense, buyers overwhelm them. The pattern completes with a strong close, and the trend officially flips from bearish to bullish.
This psychological shift is why the pattern works when it works. It's not just three up days—it's three days where sellers consistently failed to defend, where shorts repeatedly got squeezed, where buyers demonstrated sustained commitment. That combination of forced buying (short covering) and discretionary buying (new longs) creates powerful momentum.
Where Three White Soldiers Works Best
After Extended Downtrends
The pattern's reliability increases significantly after prolonged declines. When a stock has dropped 30%, 40%, or more over weeks or months, sellers eventually become exhausted. Everyone who wanted to sell has sold. Remaining holders are stubborn or underwater. At this point, even moderate buying can trigger a reversal.
Three White Soldiers appearing after such conditions often marks the exact bottom. The first candle represents the initial "capitulation" of sellers—the final flush before reversal. The next two candles show that the bottom is real, not just a dead cat bounce.
Real example: In March 2020, numerous stocks formed Three White Soldiers patterns at the pandemic bottom. After crashing 30-50% in weeks, these stocks printed three consecutive strong bullish candles as panic selling exhausted and value investors stepped in. Many of these reversals proved sustainable, launching multi-month rallies.
At Key Support Levels
The pattern gains potency when it forms at established support—prior lows, major moving averages (200-day), Fibonacci retracement levels, or horizontal price levels that previously acted as floors.
Why? Support levels represent prices where buyers have historically stepped in. When Three White Soldiers forms at support, it combines technical reversal signals (the pattern) with logical reversal levels (the support). Shorts hitting their targets at support plus buyers seeing value create the perfect setup.
Real example: A stock falls to its 2022 low, a level that's held three times previously. Sellers try to break through but can't. Then Three White Soldiers forms right at this support. The first candle bounces off support, showing buyers defending. The next two confirm that the support is real and sellers are retreating.
With Oversold Conditions
When RSI drops below 30 or the price falls well below the lower Bollinger Band, the stock becomes oversold—conditions from which sharp bounces frequently emerge. Three White Soldiers appearing in these conditions often signals the start of a mean reversion move.
However, oversold reversals can be traps. Just because a stock is oversold doesn't mean it's a bottom—it can become more oversold. Three White Soldiers provides confirmation that the oversold condition is triggering actual buying, not just a temporary pause in selling.
Trading Three White Soldiers: Practical Strategies
Strategy 1: Aggressive Entry on Confirmation
Entry: Buy at the close of the third candle or at the open of the fourth session (the day after pattern completion).
Stop Loss: Below the low of the first candle in the pattern.
Profit Target: First target at a 1:2 risk-reward ratio. For example, if your stop is $2 below entry, take partial profits at $4 above entry. Move stop to breakeven, then let the remainder run with a trailing stop.
Rationale: This strategy captures the initial momentum burst after pattern completion. By entering immediately, you ride the wave of new buyers who recognize the reversal and shorts who continue covering.
Example: Stock ABC forms Three White Soldiers after a 30% drop:
- First candle: $45 → $48
- Second candle: $47 → $50
- Third candle: $49 → $52
You enter at $52 (close of third candle) with stop at $44 (below first candle low at $45, giving some buffer). Risk is $8 per share. First target is $60 ($16 gain, 2:1 ratio). Stock rallies to $60 over the next two weeks as shorts cover and momentum buyers pile in. You take half profits there, move stop to breakeven, and trail the remainder.
Pros: You catch the move early and maximize potential gains. Cons: Higher risk of false breakouts if the pattern fails. Some traders wait for additional confirmation like a fourth bullish candle or a pullback to the pattern's high.
Strategy 2: Conservative Entry on Pullback
Entry: Wait for a pullback after the pattern completes, then enter when price resumes the uptrend.
Stop Loss: Below the low of the pullback candle.
Profit Target: Same aggressive approach—1:2 risk-reward for initial target, then trail stops.
Rationale: After Three White Soldiers, price often pulls back as early buyers take profits and shorts test the waters. This pullback provides a second chance entry with better risk-reward—you're entering closer to support (the pattern's low) and often closer to a logical stop level.
Example: Same ABC stock:
- Pattern completes at $52
- Over the next three days, price pulls back to $48 (near the third candle's open)
- Price then breaks back above $50 on strong volume
- You enter at $50.50 with stop at $47 (below pullback low)
- Risk is $3.50, first target is $57 (1:2 ratio)
Pros: Better entry price, tighter stop, often clearer confirmation that buyers are still interested. Cons: You might miss the move if price doesn't pull back and just keeps running. Some traders place orders above the pattern's high to catch continuation without pullback.
Strategy 3: Multi-Timeframe Confirmation
Entry: Only take Three White Soldiers patterns on your trading timeframe when the higher timeframe shows aligned bullish context.
Stop Loss: Standard placement below the pattern low.
Profit Target: Scale out at levels corresponding to higher timeframe resistance.
Rationale: Three White Soldiers on a daily chart is more powerful when the weekly chart shows a bullish trend or a major support level. Conversely, a daily Three White Soldiers forming during a weekly downtrend might be a bear flag continuation pattern, not a reversal.
Example: You're scanning daily charts for Three White Soldiers. You find a candidate stock and check the weekly chart. The weekly chart shows:
- The stock is at a 2-year low (major support)
- RSI on weekly timeframe is oversold (below 30)
- A prior weekly low at this level held 18 months ago
This multi-timeframe alignment increases confidence. You enter the daily Three White Soldiers pattern, understanding that you're playing a reversal that could last weeks or months, not just days.
Success Rate and Performance
Let's be honest about what the data actually shows. Three White Soldiers is considered one of the more reliable candlestick patterns, but "reliable" doesn't mean "sure thing."
Various backtesting studies and trading research suggest:
- Bullish reversal probability: Roughly 60-70% of Three White Soldiers patterns lead to at least some short-term upside (over the next 5-10 trading days)
- Strong continuation probability: About 35-45% of patterns result in sustained trends lasting weeks or months
- Failure rate: Approximately 30-40% of patterns fail immediately or result in only minor moves before reversing lower
These numbers vary significantly based on market conditions and context:
- After extended downtrends at major support: Success rates can approach 75%+
- In choppy, range-bound markets: Success rates drop closer to 50% (essentially a coin flip)
- During strong downtrends: Failures are more common as the pattern becomes a bear flag
The key insight: Three White Soldiers is a context-dependent pattern. It works exceptionally well when it aligns with other factors (support, oversold, trend exhaustion) and poorly when it fights the broader trend.
Real-World Backtesting Results
A study of S&P 500 stocks from 2010-2020 found that Three White Soldiers patterns appearing after 20%+ declines with RSI below 30 produced an average 8.5% gain over the next 30 trading days, with 68% of trades profitable. Not bad—though the best performing 20% of patterns produced average gains of 22%, while the worst 20% lost an average of 6%.
This variability is why position sizing matters. If you risk 1% per trade and target 2-3% gains, you can absorb the losers while letting the winners run. But if you swing for the fences on every pattern, a few failures will severely damage your account.
Common Mistakes to Avoid
Mistake 1: Trading the Pattern in Isolation
Seeing Three White Soldiers and hitting buy without considering context is a recipe for losses. The pattern must align with:
- Support levels: Is price at a logical reversal point?
- Trend context: Is this reversing an extended downtrend or fighting a strong bear move?
- Volume: Is there genuine participation or thin liquidity?
- Market condition: Is the overall market supporting reversals (risk-on) or crushing them (risk-off)?
I've seen traders excitedly buy Three White Soldiers patterns in stocks that are fundamentally collapsing—missing earnings disasters, fraud revelations, or industry downturns. No candlestick pattern can fix a broken business.
Mistake 2: Ignoring Pattern Quality
Not all Three White Soldiers are created equal. Red flags that reduce reliability:
- Tiny bodies: If the candles are small, the pattern shows weak buying pressure, not strong conviction
- Long upper wicks: This shows rejection at highs—sellers are still active
- Gaps between candles: Clean patterns have each candle opening within the prior body. Gaps suggest disjointed price action
- Declining volume: Falling volume across the pattern indicates dwindling interest
The best patterns show strong, sustained bodies with minimal wicks and stable or increasing volume. Anything less deserves skepticism.
Mistake 3: Poor Risk Management
Here's the brutal math: if you risk 5% per trade and lose on 3 consecutive Three White Soldiers trades (which happens), you're down 15%. To recover that at a 2% risk level, you need seven consecutive wins just to get back to even. Many traders never recover.
The fix: risk 0.5-1% per trade maximum. Set your stop based on the pattern's low (usually below the first candle), then size your position so that if stopped out, you lose exactly 1% of your account. This ensures no single pattern can significantly damage your account.
Mistake 4: Forgetting Profit-Taking
Three White Soldiers triggers greed—traders see the reversal potential and hold for massive gains. But markets don't move in straight lines. After a strong 3-day rally, a pullback is normal. If you don't take profits, you'll watch gains evaporate on the first correction.
The solution: scale out. Take partial profits at predetermined levels (1:2 risk-reward, 2:1, etc.) and trail a stop on the remainder. This locks in gains while leaving room for extended runs. It's not sexy, but it's profitable.
Mistake 5: Overtrading the Pattern
Scanning hundreds of stocks daily will turn up Three White Soldiers candidates constantly. If you trade every one, you'll get churned to death in commissions and slippage.
Better approach: be selective. Only trade patterns that meet your quality criteria, align with your thesis, and appear in stocks you actually want to own. I'd rather miss a mediocre setup than lose money on a marginal trade.
Advanced Techniques and Variations
Three White Soldiers with Gaps
A powerful variation shows gaps between the candles—each candle opens not just within the prior body, but above the prior candle's high. This shows extreme strength: buyers are so aggressive that they're gapping price up without giving sellers a chance to enter.
These patterns are rare but potent. The upside momentum tends to be explosive, though the failure risk is also higher (gaps can get filled quickly). Tighten stops and consider taking profits faster on gap variations.
Three White Soldiers After Doji Bottom
Sometimes the bottom doesn't form with a strong bullish candle, but with a doji—a small-bodied candle showing indecision. If a doji forms at a low, followed by Three White Soldiers, the pattern is especially powerful. The doji represents seller exhaustion; the Three White Soldiers represents buyer aggression. Combined, they mark a comprehensive reversal.
Incomplete Patterns (Two Soldiers)
What if you see two strong bullish candles but the third day hasn't happened yet? Some traders enter early, anticipating the pattern will complete. This is aggressive—if the third candle doesn't materialize, you're stuck in a partial pattern.
Conservative approach: wait for the third candle to close before acting. Let the pattern fully form. Better to miss a few pennies of upside than to act on incomplete information.
Combining Three White Soldiers with Other Indicators
Moving Average Confirmation
Three White Soldiers breaking above a key moving average (50-day, 200-day) adds confirmation. The moving average acts as a magnet—once price breaks above, traders who respect that level jump in. Combined with the pattern's bullish signal, you get multiple layers of confirmation.
Conversely, if Three White Soldiers forms but price remains stuck below the 200-day moving average, treat it cautiously. The long-term trend is still bearish; this might be a counter-trend rally, not a reversal.
RSI Divergence
The strongest reversals often show bullish RSI divergence: price makes a lower low, but RSI makes a higher low. This shows that downside momentum is waning even as price continues to decline. When Three White Soldiers then appears, it confirms what the divergence hinted at—sellers are done and buyers are taking over.
MACD Crossovers
Three White Soldiers coinciding with a MACD bullish crossover (signal line crossing above the MACD line) adds technical confirmation. The MACD crossover shows that momentum is shifting bullish from an indicator perspective, while the candlestick pattern shows it from a price action perspective.
When to Skip Three White Soldiers
Not every pattern deserves a trade. Sit these out when:
- The stock has major news pending: Earnings, FDA decisions, court rulings—wait for clarity
- The broader market is crashing: In 2008, countless Three White Soldiers patterns formed during the bear market rally, only to fail spectacularly as selling resumed
- The pattern forms in a thin, illiquid stock: Low volume means the reversal might not be sustainable
- Fundamentals are deteriorating: No pattern can fix a business in freefall
- You don't have a clear thesis: Why are you buying? If you can't explain your edge, you don't have one
Key Takeaways
Three White Soldiers is one of the clearest candlestick reversal patterns in technical analysis. Three consecutive strong bullish candles, each opening within the prior body and closing near its high, reveals sustained buying pressure and a shift from bearish to bullish control.
The pattern works best after extended downtrends, at key support levels, and when accompanied by expanding volume. It tells a psychological story of sellers exhausting themselves, shorts covering, and new buyers committing capital. When all these elements align, Three White Soldiers frequently marks the beginning of substantial upside moves.
But it's not magic. Roughly 30-40% of patterns fail, especially when taken out of context or during adverse market conditions. The traders who profit consistently from this pattern understand that it's one tool among many—not a standalone signal.
Success comes from combining Three White Soldiers with broader analysis: support/resistance levels, trend context, volume confirmation, and fundamental assessment. It requires disciplined risk management—small position sizes, logical stop placements, and systematic profit-taking. And it demands selectivity—only trading high-quality patterns that meet strict criteria, not every candidate that appears.
When used properly as part of a complete trading approach, Three White Soldiers helps identify high-probability reversal opportunities and time entries with favorable risk-reward. When used recklessly as a standalone signal, it becomes just another way to lose money. The difference lies entirely in how you trade it.
ChartMini automatically identifies candlestick patterns like Three White Soldiers, checks them against key support and resistance levels, and alerts you when high-probability reversal setups appear—saving you hours of chart scanning while helping you catch reversals early.