Triple Candlestick patterns can be a game changer if you get to use them alongside other fundamental and technical analyses for trading.
But what are these candlesticks? What type of triple candlestick pattern can help you in trading style? Let’s find out.
Just in case you are not aware of triple Japanese candlestick patterns, the section below might help you a bit.
What is a Triple Candlestick Pattern?
A triple candlestick pattern is a bullish or bearish reversal pattern that is composed of three candlesticks. The first candlestick in the pattern is typically a long black or red candlestick, which is followed by two small candlesticks that are the same color. The pattern is considered to be bullish if the second and third candlesticks are green, and bearish if they are red.
Overview of triple candlestick patterns
There are three main types of triple candlestick patterns: the morning star, the evening star, and the dragonfly Doji. Each of these patterns has a different meaning and can be used to predict different things about the future direction of a security’s price.
The morning star pattern is considered to be bullish, as it indicates that prices have been rising and that this trend is likely to continue. The evening star pattern is bearish, as it indicates that prices have been falling and that this trend is likely to continue. The dragonfly doji is considered to be neutral, as it indicates that prices are equally likely to move up or down in the future.
Types of Triple Candlestick Pattern
There are three main types of triple candlestick patterns: the morning star, the evening star, and the Doji. Each of these patterns has a specific meaning and can be used to predict future price movements.
Morning Star Pattern
The morning star pattern is formed when a small candle is followed by a large candle, which is then followed by another small candle. This pattern is considered bullish and suggests that prices will continue to rise.
Evening Star Pattern
The evening star pattern is formed when a large candle is followed by a small candle, which is then followed by another large candle. This pattern is considered bearish and suggests that prices will continue to fall.
Three Black Crows Pattern
The three black crows candlestick pattern is a bearish reversal pattern that consists of three consecutive black candlesticks. Each candle has a lower close than the previous one, and each candle’s opening is within the body of the previous candle. This pattern indicates that the bears are in control and that prices are likely to continue falling.
Doji Candlestick Pattern
The Doji candlestick is created when the open and close prices are equal (or very close to equal). This pattern can be either bullish or bearish depending on the context in which it appears.
Three White Soldiers Candlestick Pattern
The Three White Soldiers candlestick pattern is a bullish reversal pattern that can occur at the end of a downtrend. It is composed of three consecutive white candlesticks with each successive candlestick having a higher close than the previous one. The Three White Soldiers pattern is considered to be a very reliable indicator of a trend change.
Three Inside Up Pattern
The three inside-up candlestick pattern is a bullish reversal pattern that can occur at the end of a downtrend. It consists of three candlesticks, with the first being a bearish candle, the second candlestick being a bullish candle, and then the last candlestick being a bullish candlestick. The pattern indicates that the bears are losing control and the bulls are taking over.
Three Inside Down Pattern
The three inside down candlestick pattern is a bearish reversal pattern that consists of three candlesticks. The first candle is a long white candle, followed by a second candle being a bearish candlestick, and then a longer black/red candle. This pattern indicates that the bulls are losing control and the bears are taking over.
Common mistakes to avoid when trading triple candlestick patterns
There are a few common mistakes to avoid when trading triple candlestick patterns
What is a master candle in trading?
A master candle is a candlestick that represents the overall direction of the market for a given period of time. It is usually used in conjunction with other technical indicators to help identify market reversals and confirm trends.
What do traders understand from three candlestick patterns?
The downtrend continues on the first candle, with a significant sell-off leading to new lows. This typically increases seller confidence while discouraging new buyers.
The third candle usually signals a bullish reversal, which may entice new long traders while trapping any lingering short sellers. Whereas the third candlestick patterns make more and better entry points for long traders. All this combined can be really a trap if forex traders fall into the entry if not entered at the right time and after confirmation.
Which candlestick pattern is most bullish?
The candlestick pattern that is most bullish is the three-white soldiers pattern. This pattern is formed when three consecutive candlesticks close higher than the previous candlestick, with each candle having a higher close than the open. This indicates that buyers are in control and that prices are likely to continue to rise.
