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Three White Soldiers

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Three white soldiers will show on a chart as a bullish pattern indicating where the stock is going. This works as three consecutive increases will move around. There are a few things to notice with these three white soldiers:

  1. The increasing sticks will have similar lengths between their closes and opens.
  2. The shadows should be small if possible.
  3. There will be very little resistance as the white soldiers are formed.
  4. Each open should be within the previous body of each candlestick.

While this can be a strong reversal trend following a decline, it can also confirm a positive trend. It shows that the stock is still moving forward and is not as likely to experience any extreme changes in value. You could actually put a long-trade or call option into a stock during the second point in this three-point pattern. As the second stick appears to be identical to the first, you can be confident that the third will probably be the same. This gives you a bit of time for getting ready to buy the stock.

There might be times when the soldiers are not identical. Look at the difference between each of the soldiers. You might see the third soldier is closer to the second than the second soldier is to the first one. This is a suggestion that the increases in the value of the stock have declined and that the growth in the stock will slow down. The stock might continue to go up in value, but it might not skyrocket or burst out. In fact, the stock might actually be ready to fall in value depending on how the trend moves. With that in mind, a long position is definitely recommended.