10. 3 White Soldiers (3 Black Crows)

The 3 White Soldiers or 3 Black Crows pattern is one that is formed by 3 candlesticks.

The 3 White Soldiers is formed by three consecutive green candles and each of the candles should open within the previous candle’s body.  The 3 Black Crows is formed by three consecutive red candles and each of the candles should open within the previous candle’s body.

Having this pattern suggests a strong bullish or bearish trend forming.  For the case of the 3 White Soldiers, it shows that even though each candle opens within the body of the preceding candle, which suggests a possible fall, but the candle still closes higher than before.  After three instances of closing higher than before, it confirms the bullishness in the market.  As for the 3 Black Crows, it shows that even though each candle opens within the body of the preceding candle, which suggests possible buying pressure, but the candle still closes lower than before.  After three instances of closing lower than before, it confirms the bearishness in the market.  As such these patterns can indicate the start of a trend, and can be taken as signals of a reversal.

When one encounters the 3 White Soldiers, especially just after a significant market downtrend, we can buy above the last candle of the 3 White Soldiers for a bullish reversal.  In the case of encountering the 3 Black Crows, especially just after a significant market uptrend, we can sell below the last candle of the 3 Black Crows for a bearish reversal.