Three White Soldiers

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Figure 1.

Figure 1. Three White Soldiers pattern.

Japanese name: sanpei / aka sanpei
Forecast
: bullish reversal
Trend prior to the pattern: downtrend
Opposite pattern: Three Black Crows

Construction:

  • First candle
    • a candle in a downtrend
    • white body
  • Second candle
    • white body
    • the opening price within the previous body
    • the closing price above the previous closing price
  • Third candle
    • white body
    • the opening price within the previous body
    • the closing price above the previous closing price

 


The Three White Soldiers pattern had several names historically. Japanese called it the Three Red Soldiers, because what in the Western world is referred to as a white candle, they used, in fact, red color. During the Second World War, some called the pattern the Three Marching Soldiers. Finally, now the pattern is widely known as the Three White Soldiers.

The pattern is classified as a bullish reversal and appears within a downtrend. All three lines may be formed by any candle having a white body, appearing as long lines. This means that the following candles may appear: Long White Candle, White Candle, White Marubozu, Opening White Marubozu and Closing White Marubozu. Doji candles and spinning tops are not allowed.

The first line is formed in a downtrend. Following lines, that is the second and the third one, are opening above the previous candle's opening price and are closing above the previous candle's closing price.

In the past, some authors required that the opening price of the second and the third line should be located at least halfway up of the previous candle's body height. Others required that the closing prices shall be located near the candle's high, that is that the candles should have very short shadows. Candlestick patterns and technical analysis, in general, are evolving however, and the Three White Soldiers may be used as an example of such evolution.

In fact, three long white candles in a row having every subsequent closing price higher indicate that the bulls are in control of the market.

The pattern should be confirmed, but it does not have to happen on the nearest next candle because it makes itself a significant upward move and some market participant may be willing to realize the profits. Such behaviour may lead to a temporary price drop, but candles forming the pattern create a support area which should rescue the market. Then the bulls may retake control.

If the pattern is followed by a candle closing below the first line's opening price, it should be seen as a false signal.

 

Figure 2.

Figure 2. A Long White Candle is formed at a very high trading volume. A following candle is also formed at a trading volume significantly exceeding the average. These two candles create a strong support area.
Indeed, for a few weeks the bulls and the bears are struggling for control of the market. Eventually, a Three White Soldiers pattern is created which strength is shown on the third line formed at a high trading volume. The last peak forms a resistance zone but is forced by the bulls. The pattern is confirmed by a Rising Window formed at a very high trading volume. The bulls are in control of the stock.

 

Three White Soldiers statistics

Below you can find some Three White Soldiers pattern statistics calculated by CandleScanner software.

Pattern name: Three White Soldiers
Scanner settings: daily stocks
Group: S&P500
Number of symbols: 502
Date range: 7/1/1995 - 6/30/2015
Time interval: daily candles
Total number of candlesticks: 2,236,421
Number of occurrences (Three White Soldiers): 365
Number of occurrences (all candlestick patterns): 638,570
% of occurrences (Three White Soldiers): 0.06 %
Average frequency: 6,127.2
Efficiency statistics (5 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
0 56 103 82 124
% of
Occurrences
0.00 % 15.34 % 28.22 % 22.47 % 33.97 %

 

Efficiency statistics (10 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
1 52 89 61 162
% of
Occurrences
0.27 % 13.98 % 24.38 % 16.71 % 44.66 %

 

10 top best performing symbols

Occurrences Statistics 5 candlesticks testing period
(HIGH efficiency)
10 candlesticks testing period
(HIGH efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
BXP 3 1,512.7 2 66.67 % 3 100.00 %
JBHT 3 1,678.0 3 100.00 % 3 100.00 %
SHW 3 1,678.0 0 0.00 % 3 100.00 %
RF 4 1,258.5 3 75.00 % 3 75.00 %
CLX 3 1,678.0 1 33.34 % 2 66.67 %
ES 6 839.0 1 16.66 % 4 66.67 %
HAR 3 1,678.0 2 66.67 % 2 66.67 %
PAYX 3 1,678.0 2 66.67 % 2 66.67 %
PGR 3 1,678.0 2 66.67 % 2 66.67 %
UNH 3 1,678.0 2 66.67 % 2 66.67 %

 

10 top worst performing symbols

Occurrences Statistics 5 candlesticks testing period
(FALSE efficiency)
10 candlesticks testing period
(FALSE efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
FMC 3 1,678.0 2 66.67 % 2 66.67 %
JEC 5 1,006.8 2 40.00 % 2 40.00 %
DHI 3 1,678.0 1 33.33 % 1 33.33 %
EXC 3 1,678.0 1 33.33 % 1 33.33 %
GPS 3 1,678.0 1 33.33 % 1 33.33 %
HAR 3 1,678.0 1 33.33 % 1 33.33 %
WFM 3 1,678.0 1 33.33 % 1 33.33 %
IFF 4 1,258.5 2 50.00 % 1 25.00 %
KMX 4 1,157.8 1 25.00 % 1 25.00 %
RF 4 1,258.5 1 25.00 % 1 25.00 %
Pattern name: Three White Soldiers
Scanner settings: daily stocks
Group: S&P500
Number of symbols: 502
Date range: 7/1/2010 - 6/30/2015
Time interval: daily candles
Total number of candlesticks: 614,034
Number of occurrences (Three White Soldiers): 85
Number of occurrences (all candlestick patterns): 166,328
% of occurrences (Three White Soldiers): 0.05 %
Average frequency: 7,223.9
Efficiency statistics (5 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
0 10 22 30 23
% of
Occurrences
0.00 % 11.76 % 25.88 % 35.29 % 27.07 %

 

Efficiency statistics (10 candlesticks testing period)

Efficiency NO DATA FALSE LOW MEDIUM HIGH
Number of
Occurrences
1 9 17 18 40
% of
Occurrences
1.18 % 9.41 % 20.00 % 21.18 % 48.23 %

 

10 top best performing symbols

Occurrences Statistics 5 candlesticks testing period
(HIGH efficiency)
10 candlesticks testing period
(HIGH efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
ES 2 629.0 0 0.00 % 2 100.00 %
FLS 2 629.0 0 0.00 % 2 100.00 %
UA 2 629.0 0 0.00 % 2 100.00 %
WFM 2 629.0 2 100.00 % 2 100.00 %
CNX 2 629.0 1 50.00 % 1 50.00 %
RF 2 629.0 1 50.00 % 1 50.00 %

 

10 top worst performing symbols

Occurrences Statistics 5 candlesticks testing period
(FALSE efficiency)
10 candlesticks testing period
(FALSE efficiency)
Symbol Number of
Occurrences
Average
Frequency
Number of
Occurrences
% of
Occurrences
Number of
Occurrences
% of
Occurrences
CNX 2 629.0 1 50.00 % 1 50.00 %
RF 2 629.0 1 50.00 % 1 50.00 %
VMC 2 629.0 1 50.00 % 1 50.00 %

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