Now when you hear “The White Soldiers and The Black Crows” What exactly comes to mind? Some of you will probably be like “”hmmm….. Sounds like the title of an apocalyptic battle between good and evil.” Or” They could be the names of two heavy metal bands.” Sorry, to disappoint you, but it’s none of the above.. The Three White Soldiers and the Black Crows are the names of two popular trend reversal patterns,both of which we are going to learn how to trade today. Now some of you are probably wondering “Those are weird names for forex trading strategies.” Well, I guess forex traders have a morbid sense of humor after all.
So here is what we’re going to do.We’re going to individually take a look at both patterns. Next we’ll see how both patterns play out together on the charts. And,to put the icing on the cake, we’ll learn how to trade both patterns.
What is The Three White Soldiers Pattern
The Three White Soldiers pattern is a bullish reversal trend,consisting of three bullish candlesticks. This pattern begins at the end of the downward or bearish trend. In other once, the bears run out of steam,the bulls take over the show. Now how would you know that the Three White Soldiers Pattern is forming? When you have three bulls forming consecutively?And they must open within the body of the previous candlestick.
Also, each bullish candlestick closes higher than the previous candlestick. This suggests that more traders are jumping on the Three White Soldiers bandwagon. Even better, more traders are also from this trend You definitely want to keep your eagle eyes open for this trend.
Now let’s take a look at how the Three White Soldiers look like by themselves.
This is what the Three White Soldiers pattern looks like. You have three long candles climbing to the heavens with each one unfolding at the same time. And each oneupens within body of the previous candlestick. When you see such a scenario, nobody has to tell you it’s an uptrend and that you need to put in your buy order.
Now let’s see how the Three White Soldiers Look like on the price chart
As you will have noticed, the Three White Soldiers take shape at the end of the downward trend. It’s for all intent and purposes a reversal pattern. as the bears start to run out of breath at the end of the downward trend the three white soldiers start their upward surge. As I indicated, previously,each candlestick unfurls(or unfolds) in front of the previous candle. So as the soldiers keep climbing higher,the opportunity to make huge profits become more apparent.
Next up is:
What Is The Three Black Crows Pattern?
Well, just like The Three Black Crows pattern is also a reversal pattern. Except that, it unfurls on the downtrend. When the bullish White Soldiers eventually run out of stamina, the Three Black Crows take over and begin their downward surge. In this scenario, you have three long candle sticks trending downwards like a staircase. Each candlestick unfurls within the body of the previous candlestick. And each candlestick closes lower than the previous candlestick.
So whenever you see the Black Crows taken over from the White Soldiers , just remember that the downward slalom is about to start. Now let’s take a close look at what the Three Black Crows look like in portrait form
This is what The Three Black Crows look like. They are three long candlesticks trending downwards like a staircase. And just like the White Angels, each candlestick forms within the body of the previous candlestick. Consequently the value of each Black Crow drops. And when that happens,it’s time to put in your sell order.
Now let’s take a look at the Three Black Crows in action on the price charts
The Black Crows have taken over from the White Soldiers as they’ve run out of steam at the uptrend. So their downward slalom begins.Each candlestick unfolds within the body of the previous candlestick. And each candlestick closes lower than the previous stick. And when this scenario unfolds, it can only mean one thin “SELL!”
And last but not the least,
How Do I Trade Three White Soldiers/Three Black Crows Pattern?
You’d be better off trading the Three White Angels/Three Black Crows patterns in higher times.(If you are not sure about time frame analysis, look up Looking At The Big Picture Using Multiple Time Frame Analysis) . Let me break down the rules so you understand the process better.
1.If you see the White Soldiers taken shape, place your buy order 3-5 pips above the high of the third candlestick.
2. However,if the Black Crows show up, place your stop loss 3-5 pips below the low of the third candlestick.
3. You may take target your take profits at previous highs at previous highs/lows(or peaks/bottoms).
4. You then move your stop loss order to breakeven when price hits the amount that you risked or when price has made a high or low.
5. You can also decide take some of your profits when price is halfway towards your profit target.
That’s a wrap for ” The Three White Soldiers And The Three Black Crows. As you can tell, The Three White Angels and Three Black Crows are neither a battle between bad and evil nor are they names of rock bands. The White Angels and Black Crows are two popular reversal patterns known to forex traders. So if you hear their names being mentioned anywhere, make sure your minds don’t stray into the gutter for too long.
Til next time take care.
Do You Want To Join The Forex Trading Gravy Train?
If you’ve stumbled in here looking to join the forex trade bandwagon, here is what you need to do . First, look up Why Forex Trade Is So Popular. Next, you learn the fundamentals of forex trading by reading Forex Trading Basics – Top To Bottom Part I and Forex Trading Basics – Top to Bottom Part II .Next, you need to learn how to read candlestick patterns. They are the main feature of price action analysis And you need to know what these patterns are telling you. To be able to do that read the following on Fundamentals of Reading Candlestick Patterns, Single Candlestick Patterns, Dual Candlestick Patterns, and Triple Candlestick Patterns . Also You Need To Know Ten Of These Candlestick Patterns . And finally If you want to give your trading skills an edge by relying on pure price action trading/analysis, instead of fancy forex robots and fancy indicators, get started with What is Price Action Trading?
Looking to get a leg up on price action analysis,?you need to learn How to Identify Support and Resistance Levels. And if you want to learn how to interpret trading zones, read up on Identifying Dynamic Support and Resistance Levels. Finally you should know How To Read Candlestick Patterns using Support and Resistance Levels.
However, if you only want to trade once a month and watch your entry rack up huge profits over a stretch of several weeks, consult How to Spot High Probability Trades. And if you are still not sure about price action trading, find out Why Price Action Trading Still Rocks . Dont let me stop you from reading the other posts as well. But the suggested posts above are the most important posts to get you started.
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