Overview

The Three White Soldiers indicator is an advanced candlestick pattern recognition tool that detects one of the most respected bullish reversal formations in technical analysis. The Three White Soldiers pattern consists of three consecutive bullish candles, each opening within the body of the previous candle and closing progressively higher. It signals a decisive shift from bearish to bullish control and is widely regarded as a strong reversal signal by institutional traders.

What sets Volensy’s implementation apart from basic pattern scanners is its multi-layer smart filtering system. Rather than simply detecting three green candles in a row, this indicator applies ratio-based body analysis, momentum confirmation, volume boost validation, and an EMA50 trend filter to ensure that only high-quality Three White Soldiers formations generate signals.

This is a premium indicator, available exclusively to Volensy members with an active subscription.

How It Works

The indicator continuously scans price data for the Three White Soldiers formation and applies four confirmation filters before generating a signal.

Pattern Requirements

For the base pattern to be recognized, all of the following must be true across three consecutive candles:

  1. All three candles are bullish — Each candle’s close is higher than its open (green/bullish body).
  2. Progressive higher closes — Each candle closes higher than the previous candle’s close.
  3. Opening within previous body — Each candle opens within the body (between open and close) of the preceding candle, not above its close. This shows continuous buying, not gap-up jumps.
  4. Small upper wicks — The upper wicks should be small relative to the body size, indicating that buyers maintained control through the close without significant selling pressure pushing price down from the high.

Filter 1: Ratio-Based Smart Filtering

The indicator calculates the body-to-wick ratio of each candle. Candles with large bodies and small wicks indicate strong conviction. The indicator requires a minimum body-to-total-range ratio (configurable) across all three candles. This eliminates doji-like candles or spinning tops that happen to close slightly higher, which do not represent genuine Three White Soldiers formations.

Filter 2: Momentum Confirmation

A momentum check ensures that the price movement across the three candles represents meaningful directional momentum, not just minor incremental closes. The total price range from the first candle’s open to the third candle’s close must meet a configurable minimum threshold relative to the asset’s recent average range.

Filter 3: Volume Boost Confirmation

The indicator checks that volume is increasing or at least sustained across the three candles. Ideally, the third candle should have higher volume than the first, indicating growing participation as the reversal gains strength. A configurable volume boost threshold ensures that the pattern is backed by genuine market interest.

Filter 4: EMA50 Trend Filter

The 50-period EMA acts as a contextual trend filter:

  • The most powerful Three White Soldiers signals occur when the pattern forms below the EMA50 and then price crosses above it, representing a true trend reversal.
  • Patterns forming well above the EMA50 may be continuation signals rather than reversals, and the indicator can optionally weight these differently.

Signal Output

When the pattern is detected and all four filters pass:

  • LONG signal fires at the close of the third soldier candle.
  • Entry price is recorded at that close.

The TP/SL system activates:

  • TP1 — 0.5% from entry
  • TP2 — 1.0% from entry
  • TP3 — 1.5% from entry
  • Stop Loss — 2.0% from entry
Note: The Three White Soldiers is inherently a bullish pattern. This indicator focuses on LONG signals. Bearish counterpart patterns (Three Black Crows) may be incorporated as SHORT signals depending on the configuration.

Key Features

  • Advanced pattern recognition — Detects the full Three White Soldiers formation with strict structural requirements, not just three consecutive green candles.
  • Ratio-based smart filtering — Analyzes body-to-wick ratios across all three candles to ensure conviction.
  • Momentum confirmation — Validates that the three-candle sequence represents meaningful price movement.
  • Volume boost validation — Checks for increasing volume participation across the pattern.
  • EMA50 trend context — Uses the 50-period EMA to assess whether the pattern is a reversal or continuation signal.
  • Real-time info panel — Displays entry price, PnL, success rate, trade duration, and signal status.
  • Multi-level TP/SL — Three take profit targets and a fixed stop loss.
  • Bar coloring — Candlesticks are colored based on the active signal direction.
  • Configurable alerts — Alerts for pattern detection, signal entries, TP hits, and SL triggers.

Configuration / Settings

| Parameter | Default | Description |
|———–|———|————-|
| Min Body Ratio | 0.6 | Minimum ratio of candle body to total range for each of the three soldiers. 0.6 means the body must be at least 60% of the candle’s total size. |
| Momentum Threshold | 1.0% | Minimum price range from first open to third close as a percentage, ensuring the pattern represents meaningful movement. |
| Volume Boost % | 10% | Minimum volume increase expected from the first to the third candle. |
| EMA Length | 50 | Period for the trend context EMA filter. |
| Require Below EMA | Off | When enabled, only signals where the pattern starts below the EMA50 are generated (pure reversal mode). |
| TP1 Level | 0.5% | First take profit target. |
| TP2 Level | 1.0% | Second take profit target. |
| TP3 Level | 1.5% | Third take profit target. |
| Stop Loss | 2.0% | Maximum loss threshold. |
| Show Info Panel | On | Toggle the floating stats panel. |
| Show Bar Colors | On | Toggle candlestick coloring. |
| Show Pattern Highlight | On | Toggle visual highlighting of the three soldier candles when the pattern is detected. |

Warning: Reducing the Min Body Ratio below 0.5 will allow candles with significant wicks to qualify, which weakens the pattern’s reliability. The default of 0.6 provides a good balance between signal frequency and quality.

Trading Signals

LONG Signal

A green LONG label appears at the close of the third soldier candle when:

  • Three consecutive bullish candles are detected with progressive higher closes.
  • Each candle opens within the prior candle’s body.
  • All three candles meet the minimum body-to-range ratio.
  • The total price movement meets the momentum threshold.
  • Volume shows a boost from the first to the third candle.
  • EMA50 trend context is satisfied.

This is a high-conviction bullish entry. The multi-filter approach means signals are infrequent but carry strong reversal probability.

Signal Resolution

The signal remains active until a TP level is hit, the SL triggers, or a new signal replaces the current trade. The info panel tracks all completed trades and cumulative success rate.

Best Practices

Recommended Markets

  • Crypto — BTC/USDT, ETH/USDT, and major altcoins. Crypto markets frequently produce candlestick patterns due to their emotional, sentiment-driven nature.
  • Stocks — Individual equities, especially after selloffs or at support levels. Three White Soldiers patterns on daily stock charts are classic institutional accumulation signals.
  • Forex — Major pairs and crosses. The pattern appears less frequently on forex than crypto, but when it does, it tends to be highly reliable.
  • Commodities — Gold and oil, particularly on daily and 4-hour timeframes.

Recommended Timeframes

  • 1-hour — Good signal frequency with solid pattern quality for intraday trading.
  • 4-hour — Higher conviction signals with stronger institutional backing.
  • Daily — The classic timeframe for candlestick pattern analysis. Three White Soldiers on the daily chart is a well-documented and respected reversal signal.
Note: On timeframes below 30 minutes, candlestick patterns tend to be less reliable because the candle formation is driven more by microstructure noise than by genuine sentiment shifts. Stick to 1H and above for this indicator.

Tips

  1. Context is everything — Three White Soldiers after a sustained downtrend is a reversal signal. Three White Soldiers in the middle of a range is less meaningful. Always check the preceding price action.
  2. Check the third candle’s volume — The third soldier should ideally have the highest volume of the three. This indicates accelerating buyer participation and increases the probability of follow-through.
  3. Look for support confluence — Patterns forming at known support levels (horizontal support, moving average, or trendline) carry significantly more weight.
  4. Do not chase if you miss the entry — The signal fires at the close of the third candle. If price has already moved significantly beyond that level by the time you see it, the risk-reward may no longer be favorable. Wait for the next opportunity.
  5. Enable “Require Below EMA” for pure reversals — If you only want to catch trend reversals (not continuations), enable this filter to restrict signals to patterns forming below the EMA50.

Related Documentation

*See also: Indicators Overview*
*See also: Understanding the TP/SL System*
*See also: Using the Info Panel*
*See also: Rounding Bottom Pattern* — Another pattern-based bullish reversal detector.
*See also: Fibonacci Momentum EMA* — Combines Fibonacci levels with EMA crossovers for confluence entries.
*See also: Indicator Comparison Guide*

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