Most Popular Three Candlestick Patterns

In this article, you will find everything you need to know about the most popular three candlestick patterns. You will also learn the identification, psychology and trading signals of three candlestick patterns.

Contents

Three White Soldiers

Three Black Crows

Morning Star

Evening Star

Key Forex Terms:

Further Readings:


Three White Soldiers and Three Black Crows, bearish candlesticks, bullish candlesticks, red candle. green candle, white background

Three White Soldiers & Three Black Crows By Let’s Forex

Three White Soldiers

Three white soldiers is a bullish reversal candlestick pattern appears at the bottom of any preceding downtrend. Below is a step by step guide to identifying, psychology and trading signals of three white soldier candlesticks pattern.

Identifying three white soldiers

To identify a three white soldier’s pattern, the following conditions must be met.

  • First, identify a preceding downtrend in the specific time frame or session.
  • Secondly, there must be three consecutive bullish candlesticks.
  • The opening of the second and third candles must be within the preceding candle.
  • The closing of the second and third candles must be above the preceding candle.

The psychology behind three white soldiers

The following bullets summarize psychology behind the bullish three white soldiers’ pattern.

  • The first bullish candlestick tells us the losing control of sellers following the prolonged downtrend.
  • The next two bullish candlesticks increase the dominance of buyers.

Trading signals of three white soldiers

  • Identify three white soldiers at the bottom of a preceding downtrend.
  • Wait till the next (fourth) candle makes its closing above the high of preceding bullish candle.
  • Open a buy/long position on confirmation.
  • Stop loss must be below the low of the first bullish candle of three white soldiers.

Three Black Crows

Three black crows is a bearish reversal candlestick pattern appears at the top of any preceding uptrend. Below is a step by step guide to identifying, psychology and trading signals of three black crows candlesticks pattern.

Identifying three black crows

To identify three black crow’s pattern, the following conditions must be met.

  • First, identify a preceding uptrend in the specific time frame or session.
  • Secondly, there must be three consecutive bearish candlesticks.
  • Opening of the second and third candle must be within the preceding candle.
  • Closing of the second and third candles must be below the preceding candle.

The psychology behind three black crows

The following bullets summarize the psychology behind the bullish three black crows’ pattern.

  • The first bearish candlestick tells us the losing control of buyers following the prolonged uptrend.
  • The next two bearish candlesticks increase the dominance of sellers.

Trading signals of black crows

  • Identify three black crows at the top of a preceding uptrend.
  • Wait till the next (fourth) candle makes its closing below the closing of the preceding bearish candle.
  • Open a sell/short position on confirmation.
  • Stop loss must be above the high of the first bearish candle of three black crows.

Morning star, Evening star, bullish candle, bearish candle, bullish reversal, bearish reversal, white background, Japanese candlestick

Morning Star & Evening Star By Let’s Forex

Morning Star

Morning star is a bullish reversal candlestick pattern appears at the bottom of any preceding downtrend. Below is a step by step guide to identifying, psychology and trading signals of morning star candlestick pattern.

Identifying morning star

To identify a morning star pattern, the following conditions must be met.

  • First, identify a preceding downtrend in the specific time frame or session.
  • The first candle of morning star must have a long bearish body.
  • The second candle opens with a down gap having a small bearish or bullish real body.
  • .The third bullish candle opens with an up gap and closes at least equal to or above the 50% of the first bearish candle.

The psychology behind morning star

The following bullets summarize the psychology behind the morning star pattern.

  • The first bearish candlestick tells us the continuous control of sellers in a downtrend.
  • The down gap of the second candle further indicates the dominance of bears but with losing control of sellers as indicated by a small real body.
  • Opening of the third candle with an up gap and its closing above or equal to 50% of the first candle indicates the bulls are gaining control with covering its losses in the morning star pattern.

Trading signals of the morning star

  • Identify the morning star pattern at the bottom of a preceding downtrend.
  • The closing of the fourth candle above the high of third candle of morning star signals the bullish reversal.
  • With the confirmation of morning star and reversal, open a buy/long position.
  • Stop loss must be below the low of the second candle.

Evening Star

The evening star is a bearish reversal candlestick pattern that appears at the top of any preceding uptrend. Below is a step by step guide to identifying, psychology and trading signals of evening star candlestick pattern.

Identifying evening star

To identify an evening star pattern, the following conditions must be met.

  • First, identify a preceding uptrend in the specific time frame or session.
  • The first candle of evening star must have a long bullish body.
  • The second candle opens with up gap and has a small bearish or bullish real body.
  • .The third bullish candle opens with a down gap and closes at least equal to or below the 50% of first bearish candle.

The psychology behind evening star

The following bullets summarize the psychology behind the evening star pattern.

  • The first bullish candlestick tells us the continuous control of buyers in an uptrend.
  • The up gap of the second candle further indicates the dominance of bulls but with losing control over sellers as indicated by the small real body.
  • The opening of the third candle with a down gap and its closing below or equal to 50% of the first candle, indicates the bears are gaining control. It also tells us covering its losses in an evening star pattern.

Trading signals of the evening star

  • Identify evening star pattern at the top of a preceding uptrend.
  • The closing of the fourth candle below the low of third candle of evening star signals the bearish reversal.
  • With the confirmation of evening star and reversal, open a sell/short position.
  • Stop loss must be above the high of the second candle.

Key Forex Terms:

Bullish engulfing, Bullish reversal, Bearish engulfing, Bearish reversal, Down gap, Dark cloud cover, Piercing, Long, Short, Tweezer, Tweezer Top, Up gap, Resistance

Further Readings:  

Top Six Most Popular Double Candlestick Patterns

Most Popular Single Candlestick Patterns

Introduction To Japanese Candlesticks

Other helpful resources:

What is forex?

Forex Scalping

Divergences in forex

Ichimoku Kinko Hyo and Trading Signals

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2 Responses

  1. downloadapkpure says:

    I always read different websites to learn forex but this is a unique site especially for candlestick related articles. I have also shared the article with my friends with Facebook and Pinterest. thanks for a good piece of the writeup.

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