# Three white soldiers

**TA-02b · Technical Analysis · Core**

**Lesson question:** How do you recognize three white soldiers without treating it as an automatic entry?

Original fictional examples; educational writing, not live market data, orders or production approval.

## By the end

- Read the exact candle geometry.
- Identify prior context.
- State a confirming and an invalidating branch.

**Prerequisites:** TA-01, TA-02

Three white soldiers describes repeated bullish follow-through through three bodies and higher closes. It is more informative than counting three green candles: the opens, closing progress and preceding location also matter.

## Put location before the name

The fictional setup occurs after a base following a decline, rather than the late stage of an already extended rally. That reference must be known before identifying the signal; otherwise a trader can invent convenient support or resistance afterward. Match the pattern's timeframe with the context timeframe and state when the bars finish.

The illustration is an original teaching sequence, not an alert, backtest or historical probability. The user's candle panel supplies the syllabus, not a specification for automated trading thresholds.

## Read the geometry

Closes progress from 100.50 to 102.60 to 104.60. Each later open lies inside the preceding body in this example and finishes higher. The gain from first close to third close is 4.10. Exact shadow-length thresholds are conventions, not universal guarantees.

## Walk both next-bar branches

A confirming branch for this particular process is a subsequent pullback that preserves the newly built higher-low structure. An invalidating branch is a rapid return below 100 that erases the later candles' progress. Write both before watching the next interval. Confirmation is additional evidence, not certainty; failure means the original premise needs reassessment.

Even a visually confirmed pattern can offer poor execution economics. Check the next obstacle, spread, available liquidity and consequence of a failed entry. A bullish candle does not automatically justify buying an expensive call, and a bearish one does not justify uncovered short calls.

## Read the completed bars

Use these exact data: bar 1: open 98.00, high 101.00, low 97.70, close 100.50; bar 2: open 100.00, high 103.00, low 99.80, close 102.60; bar 3: open 102.10, high 105.00, low 101.90, close 104.60. Begin with open and close, then inspect the shadows. Compare completed intervals; do not assume a particular high–low order within one interval.

Closes progress from 100.50 to 102.60 to 104.60. Each later open lies inside the preceding body in this example and finishes higher. The gain from first close to third close is 4.10. Exact shadow-length thresholds are conventions, not universal guarantees.

Now rehearse the favorable and adverse branches above. Explain what would change your confidence without changing the already-completed candle. The chart and popup use this same OHLC sequence, so the lesson can be reproduced numerically rather than memorized from a decorative drawing.

## Calculation popup: Candle measurements

```text
Body=|C−O|; upper=H−max(O,C); lower=min(O,C)−L
```

These are measurements, not probability estimates.

1. Bar 1: body 2.50; upper wick 0.50; lower wick 0.30.

2. Bar 2: body 2.60; upper wick 0.40; lower wick 0.20.

3. Bar 3: body 2.50; upper wick 0.40; lower wick 0.20.

**Result:** 4.10.

## Graph: Three white soldiers—fictional completed intervals

**Horizontal:** Completed interval  
**Vertical:** USD per share

Prior context: a base following a decline, rather than the late stage of an already extended rally. The data table preserves every open, high, low and close. Intrabar high/low order is not known from these bars.

Complete numerical data are embedded in `scripts/technical-analysis/TA-02b.js` and displayed as an accessible table in the HTML lesson.

| Bar | Open | High | Low | Close |

|---:|---:|---:|---:|---:|

| 1 | 98 | 101 | 97.7 | 100.5 |

| 2 | 100 | 103 | 99.8 | 102.6 |

| 3 | 102.1 | 105 | 101.9 | 104.6 |

## The named shape is not a guarantee

The adverse branch is a rapid return below 100 that erases the later candles' progress. Maintaining the original label does not restore the premise. A similar-looking candle in the middle of overlapping range trade may have much less useful context.

Another failure is hindsight selection: locating only successful examples after seeing their outcomes. A usable process needs stated definitions, transaction costs and out-of-sample evaluation before any claimed edge.

## Check your understanding

### How far did the close rise between the first and third soldiers?

**Answer:** 4.10.

**Why:** Calculate from the supplied OHLC, then distinguish geometry from the uncertain future.

### Does this pattern establish a profitable options entry?

**Answer:** No.

**Why:** Instrument price, time, liquidity and the loss scenario must also be evaluated. **Critical risk check.**

## Takeaway

Recognize the three white soldiers, locate it, and explain both confirmation and failure before discussing a trade.

## References and provenance

The cited references support definitions and conventions. The teaching prose, tickets and numerical scenarios are original; they are not attributed as historical market observations.

- [Fidelity Chart Patterns Reference](https://www.fidelity.com/quick-content/etf/help/research/learn_er_quotes.shtml)