Detecting Three White Soldiers and Three Black Crows with Candle Sequences

Summary

This short note shows how to flag two three-candle formations: three white soldiers and three black crows. The detection rules check that each candle in the sequence closes above or below its open, respectively, and that the closes move progressively upward or downward across the three bars. When a pattern is present, the indicator returns a positive or negative marker; otherwise, it returns zero. The author mentions forex as one possible use, but does not define trade entries, exits, or position sizing.

The material is a pattern-recognition example rather than a tested trading strategy. It gives no historical results, market comparisons, or evidence that either formation predicts subsequent returns. The rules are simplified: they do not assess candle body size, gaps, prior trend, volatility, or market context. A researcher would need to define those conditions and test the signals across instruments and timeframes before drawing conclusions about their usefulness.

Key ideas

• Three white soldiers are flagged when three consecutive candles rise and each close exceeds its open.
• Three black crows are flagged when three consecutive candles fall and each close is below its open.
• The indicator marks detected patterns with positive or negative values and otherwise returns zero.
• The example does not specify entries, exits, or position sizing.
• No performance evidence is supplied, and the rules omit broader market context.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.