Wage Growth & Three White Soldiers: Forex’s Secret Weapon for 2024

Three White Soldiers and Wage Growth: The Hidden Secrets of Forex Success

If you’re in the business of mastering forex strategies, you’ve probably heard whispers about the “three white soldiers”. No, it’s not a medieval tale, nor a reference to some folklore band of heroes. It’s actually one of the most powerful candlestick patterns in forex trading. And combined with a deep understanding of wage growth trends, this strategy might just be the key you’ve been looking for to ride the financial wave—and not end up washed out.

Let’s dive into some advanced trading techniques that aren’t your typical cookie-cutter solutions. We’ll look at hidden patterns, economic influences, and a few humor-filled anecdotes to keep you entertained. Because if you can’t laugh at yourself after making a silly trading mistake, are you even a trader?

The “Three White Soldiers” Candle Pattern: An Unconventional Friend

Imagine this—you’re walking through a forest of market chaos, and suddenly, you see three white soldiers emerge from the fog. In trading terms, these soldiers are not there to save you from a bear attack; they are here to signal that a bullish reversal is on the way. The “Three White Soldiers” is a series of three consecutive long-bodied candlesticks that steadily rise after a downtrend, usually indicating a strong shift towards optimism. Picture it like a gradual realization that things aren’t as bad as they seemed—kind of like when you finally figure out your roommate didn’t actually eat the last cookie.

But here’s where the magic happens: this pattern can only work if you add some fundamental sauce to it. Technicals can be misleading if they’re not grounded in market realities—and that’s where understanding wage growth comes in.

The Unsung Hero of Economic Indicators

Most traders fixate on classic indicators like inflation and GDP growth. However, wage growth often works behind the scenes, driving long-term trends. Think of it like the engine of an ice cream truck—it’s not flashy like the music, but without it, the whole thing isn’t going anywhere.

When wages rise, people spend more, which eventually stimulates demand. This boost often ends up strengthening the local currency. Wage growth is one of the most reliable indicators to watch if you’re trading currencies influenced by consumer behavior. You don’t even have to take my word for it—in 2023, the Federal Reserve Bank of St. Louis highlighted that robust wage growth drove the increase in the dollar index, despite declining GDP expectations. If that doesn’t make you want to watch wage growth like a hawk on a hot dog, I don’t know what will.

Combining Wage Growth With “Three White Soldiers”

Let’s get into the nitty-gritty. To put this strategy into action, you need to keep your eyes peeled for bullish wage growth data and look for three consecutive white candles on the charts. Here’s a step-by-step approach to wield this tactic effectively:

1. Monitor Wage Data Releases: Use a reliable calendar (or our trusty one on StarseedFX Economic Indicators) to stay ahead of wage growth data.
2. Wait for Confirmation: If the wage growth reports show an uptick, start looking for the “Three White Soldiers” formation on a major currency pair.
3. Enter The Market After Confirmation: Unlike buying a pair of trendy sneakers that you might regret later, you want to be sure you’ve confirmed the data and chart patterns align.
4. Set Your Stop Loss Strategically: Even the best soldiers fall sometimes. A tight stop loss is crucial to protect your capital in case the market does a nasty 180—something it loves to do, much like my cat when it hears the word “vet”.

Why Most Traders Ignore Wage Growth (And Why You Shouldn’t)

It’s funny—most traders tend to ignore wage data altogether, in favor of flashier economic metrics. Here’s the truth: they do it because wage growth data often doesn’t seem exciting. There’s no obvious adrenaline rush tied to payroll changes like there is with unemployment rates. But if you’re trying to get an edge in a crowded market, you need to go where others aren’t.

Wage growth affects demand, and demand drives markets. When you combine that with the strength of a reliable price pattern like the “Three White Soldiers”, you’ve got the recipe for consistent gains. Ask Warren Buffet—okay, don’t ask him directly, but know that he’d tell you one secret to success is finding “certainty where others see doubt.”

Economic Trends, Human Emotions, and Market Psychology

One mistake I see over and over again is traders forgetting that behind every candlestick, there is a story of human behavior. Wage growth triggers emotions. When people earn more, their optimism often translates into market sentiment—a hidden driver that impacts the direction of major currency pairs.

Consider this: back in 2019, wage growth surged in New Zealand, creating a strong NZD trend for over six months. Traders who were caught up in focusing solely on technical indicators missed a significant opportunity to profit from a wave of spending optimism. Don’t be the trader who overlooks this for the next trend. The three white soldiers were practically marching with trumpets during that time.

It’s All About the “Under the Radar” Moves

The forex world is a lot like chess—it’s the seemingly subtle, almost invisible moves that often yield the best results. Keeping tabs on wage growth and understanding its impact allows you to be two steps ahead. It’s the move that no one expects that ends up flipping the board.

This tactic works so effectively because it’s grounded in both fundamental and technical analysis. And, funnily enough, that’s what makes this strategy worth bragging about—it’s like having a well-balanced diet of protein and veggies while everyone else is binging on empty carbs (here’s looking at you, RSI overbought signals).

Wage Growth and the GBP/USD

In early 2024, wage growth data from the UK came out surprisingly strong, leading to a steady rise in the British pound. Traders who identified this growth could have capitalized on a significant uptrend, especially if they recognized the “Three White Soldiers” formation on the daily chart around mid-March. Those who missed the wage report, however, ended up like the guy at the airport who realized he was at the wrong gate—scrambling with no time to catch up.

It’s this confluence—economic health + technical confirmation—that offers high-probability setups.

But Wait, There’s More! Avoid the Rookie Mistakes

Using “Three White Soldiers” requires a certain level of finesse. Don’t forget the most important thing: context is key. These three happy campers shouldn’t appear in isolation without proper trend context. If you find them at the top of an extended uptrend, be wary—they could be signaling exhaustion instead. Sort of like when you’ve eaten five donuts and try to convince yourself the sixth is a good idea.

Always remember to use other tools for confirmation. Our Smart Trading Tool is perfect for automating lot size calculations and managing those orders so you don’t end up over-leveraged, like that one time you decided a 20x multiplier was a great way to make quick cash.

Hidden Opportunities & Key Takeaways

• Wage Growth Is an Indicator, Not a Headline Act: Learn to dig into data that others ignore. Most traders miss the bigger picture simply because they overlook smaller economic reports.
• Look for the Soldiers: Recognize the “Three White Soldiers” formation and use it as a confirmation tool.
• Manage Your Risk: Stop losses are non-negotiable. They’re like wearing a seatbelt while testing a Ferrari.

Your Next Step

The next time wage growth data is released, don’t ignore it. Align it with the technical picture and look for those telltale three white soldiers emerging from the fog of uncertainty. The traders who make it to the top are the ones who leverage the tools that others undervalue. And speaking of tools—why not check out our free trading journal to log your progress? After all, even ninjas need a blueprint to track their moves.

And hey, if you found this article useful (or at least funny enough to crack a smile), share your thoughts or questions below. We’re always here to support traders who want to stay ahead of the curve—with a little bit of humor to make the journey even more worthwhile.

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Image Credits: Cover image at the top is AI-generated