Three White Soldiers is a bullish candlestick chart pattern that signals the reversal of an ongoing downward trend, showing that prices are expected to rise. This pattern consists of three consecutive green candles, where each consecutive candle opens within the previous candle's body. For it to be considered a Three White Soldiers pattern, these candles should not have long shadows, and ideally, these shadows should be very small. It is also important that these three candles show up during a downward trend, since this is a trend reversal candlestick pattern, and it is most accurate during an ongoing downward trend. So when trading and we see the Three White Soldiers, it signals that bulls have entered the market. This pattern can also be preceded by other reversal patterns and we can use the Three White Soldiers as a confirmation of a trend reversal.

“I always laugh at people who say, ‘I’ve never met a rich technician.’ I love that! It’s such an arrogant, nonsensical response. I used fundamentals for nine years and got rich as a technician.” - Martin Schwartz

Three Black Crows

Another variation of the Three White Soldiers is Three Black Crows, which is essentially the same chart pattern, but instead, it is a bearish candlestick chart pattern. The Three Black Crows show itself after an ongoing uptrend and it consists of three consecutive candles, where each consecutive candle opens within the body of the previous candle. But the difference here is that, during Three Black Crows, we see red candlesticks, meaning that prices closed lower than they opened. This signals that bears have entered the market and prices are expected to fall. Just like with the Three White Soldiers, the Three Black Crows is also commonly used as a confirmation chart pattern that precedes other reversal chart patterns. 

To better understand this chart pattern, let’s take a look at an example. In this case, we are trading with the BTC/USD trading pair where the market has been volatile and the last candle showed a very significant drop in price. We can see that after this candle, the next candle that followed it is a green candle with a very long body, which is followed by another green candle that opened within the body of the previous candle, this second candle was followed by a similar third candle. 

Looking at the chart we can see that prices started to grow and the market entered a short uptrend. This would have been a good time to open long positions or close ongoing short positions. But as you can see, this uptrend did not last for very long and prices started to drop once again. This is caused by the volatility of cryptocurrencies and because of this, it is not advised to blindly trust just a few candlestick patterns when making decisions.