Understanding Candlesticks_11. 3 White Soldiers 3 Black Crows

Lesson 11: 3 White Soldiers 3 Black Crows Depicted using three candlesticks, the three white soldiers is a signal for a bullish reversal. All three candlesticks have large real bodies and have very small or non-existent shadows. The first candlestick is usually a bullish piercing or bullish engulfing candle. The second candle should be bigger than the first - and the third candle should be at least the same size as the second candle. Similarly, three black crows are a signal for bearish reversal patterns. The same as its bullish counterpart, it consists of three long candles with small or no upper shadows. The first candlestick has either a dark cloud cover or a bearish engulfing candlestick. The second candle should be bigger than the first and the third can be either the same size or larger than the second. The problem with both of these candlestick signals is that by the time they have fully materialized, the price may have already made the biggest move, so you can’t jump in the market straightaway. One way to use these signals is to determine when to get out of your existing positions. For example, you have been short here and after seeing three white soldiers appearing, you close your position to protect your profit. Another way to use them for trading is to wait for the price to retrace and then enter the market with smaller risks. An example here; after three black crows have appeared, you wait for the price to rise again and short the market here. Remember though - just like all the other candlestick signals, these are only valid when seen in at the resistance and support levels.