Chandan Taparia
Three White Soldiers are trend reversal patterns. It usually indicates a weakness in an established downtrend and the potential emergence of an uptrend, while The Three Black Crows pattern is a bearish reversal pattern that consists of three bearish candlesticks that are dark in color.
This is a moderate trend reversal pattern that should only come into consideration when it appears in a rally or an established uptrend
1. Three White Soldiers (Bullish Pattern):
Three white soldiers is a bullish candlestick pattern that predicts the reversal of a downtrend. The pattern consists of three consecutive long-bodied candlesticks that open within the previous candle's real body and a close that exceeds the previous candle's high.
Each of the three candlesticks should close on or near the high price for the period and with each candlestick making steady advances in price. Each candlestick should not have long upper shadows or wicks and should preferably open within the real body of the preceding candlestick in the pattern.
When this pattern appears in a downtrend, it indicates the potential emergence of strength and a possible trend reversal.
2. Three Black Crows ( Bearish Pattern) :
Three black crows is a bearish candlestick pattern that is used to predict the reversal of the current uptrend. This pattern consists of three consecutive long-bodied candlesticks that have opened within the real body of the previous candle and closed lower than the previous candle.
Each successive candlestick should mark a steady decline in price and should not have long lower shadows or wicks. Preferably, each of the three candlesticks should open within the real body of the preceding candlestick in the pattern but this is not essential.
When this pattern appears in an uptrend, it indicates the potential weakening of the trend and a possible trend reversal.
Disclaimer: The author is a Derivatives and Technical Analyst at Motilal Oswal Securities. The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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