What makes dual candlestick patterns superior?
TRIPLE candlestick designs!
To recognize triple Japanese candlestick patterns, look for specific formations that include three candlesticks in total.
These candlestick formations assist traders in predicting how the price will behave in the future.
Three candlestick patterns are reversal patterns, which indicate the conclusion of one trend and the beginning of another in the opposite direction.
The last three candlestick patterns are continuation patterns, which indicate a pause followed by the continuation of the present trend.
Consider the popular triple Japanese candlestick patterns.
Evening and Morning Stars
Morning Star and Evening Star are triple candlestick formations that appear at the end of a trend.
They are reversal patterns distinguished by three characteristics.
1. The first candlestick is a bullish candle, which is part of a recent uptrend.
2. The second candle has a small body, indicating that there could be some indecision in the market. This candle can be either bullish or bearish.
3. The third candlestick acts as a confirmation that a reversal is in place, as the candle closes beyond the midpoint of the first candle.
Three White Soldiers and Black Crows
The Three White Soldiers pattern appears when three long bullish candles follow a DOWNTREND, indicating a reversal.
This type of triple candlestick pattern is regarded as one of the most powerful in-your-face bullish indications, particularly when it happens following an extended decline and a brief period of consolidation.
The reversing candle is the first of the “three soldiers.” It either indicates the conclusion of the decline or that the period of consolidation that followed the slump is finished.
The second candlestick should be larger than the prior candlestick’s body for the Three White Soldiers pattern to be recognized genuine.
Furthermore, the second candlestick should close at its high, with a small or non-existent upper wick.
To complete the Three White Soldiers pattern, the last candlestick should be at least the same size as the second candle and have a tiny or no shadow.
Three Inside Up and Down
- The first candle should be found at the bottom of a downtrend and is characterized by a long bearish candlestick.
- The second candle should at least make it up all the way up to the midpoint of the first candle.
- The third candlestick needs to close above the first candle’s high to confirm that buyers have overpowered the strength of the downtrend.
The Three Inside Down candlestick formation, on the other hand, is found near the top of a UPTREND.
It indicates that the uptrend may have ended and that a new downturn has begun.
The following characteristics must be present in a three inside down candlestick formation:
- The first candle should be found at the top of an uptrend and is characterized by a long bullish candlestick.
- The second candle should make it up all the way down the midpoint of the first candle.
- The third candlestick needs to close below the first candle’s low to confirm that sellers have overpowered the strength of the uptrend.
Next Lesson: Candlestick with Support and Resistance
