The Three White Soldiers is one of those useful patterns to remember and keep an eye out for. Simply put, this is a pattern that signals a rigorous rise in prices and often appears after a strong downwards trend.
In trading, distinctive patterns sometimes appear in your charts. You can use these patterns of prices to predict how the price of the asset will react and in what direction it will go. Used properly, one can capitalize on these patterns – because if you have an idea what will happen next, you know when and where the best entry and exit points will be.
In this article, we’ll discuss everything you need to know about the pattern, as well as the basics of using the Three White Soldiers when trading on Binomo!
How to Identify the Three White Soldiers
Before we begin, it’s important to know first how to identify the three white soldiers in the first place. Sure, this pattern displays strong uptrends and often signals the end and strong retracement of a downtrend. But what exactly does it look like?
The visual cue for this pattern consists of three green candles appearing right next to each other, and the next one remarkably higher than the last. This is because the next chart’s opening price will be within the last candle’s body and closes above the last candle’s closing high. These candles generally have thick bodies and very short wicks or shadows.
Take note that the length and size of a Japanese candlestick are indicative of the risk of a retracement happening in the charts.
Therefore, the more similar the three green candles are, the stronger the pattern – because there is little to no risk of retracement at the moment. A true TWS pattern happens when the three candles have about the same length of the true body and the same (short) length of the wicks. For example, one green candle followed by a bullish doji, and then by a bullish pin bar, does not constitute a true pattern.
Because this is primarily a visual pattern, it is used by traders to judge good entry or exit points. Traders who were short-selling the asset will take that as a sign to exit the market, while traders who were hoping for a bullish position will see this as the perfect chance to enter the market.
This pattern suggests an abrupt and energetic reversal of sentiments about the asset being traded in the financial markets. When one candle closes with small or no wicks, it implies that the bull traders have gained momentum over the session and traders are now valuing the stock much higher than it is worth. This results in a surge of buying as more and more traders trade along the trend, which raises the price of the asset rapidly.
Trading using the Three White Soldiers pattern on Binomo
As the Three White Soldiers pattern is a signal of a coming strong upward surge, if you spot it early on it just might become the turning point to your trading career. Used properly, the uptrend that this pattern could produce can significantly increase your balance. So if you spot the TWS pattern on 15-min candles, it’s an assurance that you can ride the trend for a 30-min buying position.
Your bullish position will be profitable no matter which of the three soldiers you begin to enter the market from, but it’s always best to identify this pattern early on and trade on the very first Soldier that appears, as it will bring you higher gains.
Another thing to note is that the Three White Soldiers that the strong move upwards can create overbought conditions that could last temporarily. This may result in a short time of consolidation – which means that the trend will stop moving higher and may even seem to go back down for a while. This happens as some asset owners realize the sudden rise in the value of their stock and begin to sell instead. However, the momentum should be recovered in a short amount of time and the overall direction of the price movement should still be bullish.
Conclusion
The important consideration when trying to ride the Three White Soldiers pattern is your attentiveness and your eye for detail.
The Three White Soldiers is a strong, predictable signal that you can take advantage of to increase your demo account’s balance in Binomo. It can even potentially reverse the dents that a string of bad luck has made on your account.
Have you had success in dealing with this notable pattern before? Don’t hesitate to share your experiences down below!
Good luck on your trading journey with Binomo!