Three White Soldiers in the Expansion Phase: Mastering This Little-Known Strategy

We’ve all been there, traders—waiting for a clear signal to jump into the market. Maybe it’s like waiting for your pizza delivery, where every second feels like an eternity. But what if I told you that those delicious three white candles—affectionately known as the ‘Three White Soldiers’—could be your reliable market signal, especially during an expansion phase? Let’s break it down, and don’t worry, we’ll keep it lighter than your last margin call.

Why the Expansion Phase Matters More Than Your Gym Membership

First things first, the expansion phase. No, we’re not talking about your gym membership that you keep paying for without visiting—although expanding in the market is a lot more rewarding. The expansion phase refers to the part of the market cycle where the trading range is, you guessed it, expanding. This is where volatility is up, the market’s throwing a party, and more opportunities present themselves like free samples at a weekend supermarket visit. It’s when everything gets a little wild—in a good way.

Think of it as the moment when the market stretches after a nap, gathering momentum and energy. During this time, price action becomes more dynamic, and for traders, this is where all the excitement happens. The challenge? Spotting when the market’s about to stretch. And this, my friends, is where the Three White Soldiers come marching in.

Three White Soldiers: Not Just Any Soldiers—These Guys Mean Business

So, what exactly are the ‘Three White Soldiers’? If you’re imagining toy soldiers marching on your chart, you’re not too far off. This candlestick pattern consists of three consecutive long green (or white) candles, each with a close higher than the previous. Picture a triumphant climb—one candle leading the next to victory like a successful chain of elevator trips.

These soldiers appear when bullish momentum is building up, typically after a downtrend or a period of market consolidation. They are your signal that the bulls have had their morning espresso and are charging ahead. You might think of them as the “significant other” who insists you can absolutely conquer that early morning workout—but in this case, they’re helping you conquer the market.

The Hidden Expansion Secrets That Separate Amateurs from Pros

Many traders recognize the Three White Soldiers, but fewer know how powerful they become during an expansion phase. Let me let you in on a secret: the expansion phase is a great stage for these soldiers to shine because that’s when liquidity is pouring in, and the movement has the backing of volume. It’s like catching a wave when it’s swelling—if you time it right, you’re in for a spectacular ride.

Here’s a contrarian tip: sometimes, traders enter the market the moment they see this pattern—without verifying whether it’s supported by expanding volume. No volume? No wave to catch. Entering a trade based on pattern alone is like buying shoes because they look good online—sometimes they fit perfectly, but other times they pinch in all the wrong places.

When these candles are accompanied by increasing trading volume, this signifies a strong bullish intent—in other words, our soldiers have backup. During the expansion phase, this could be the sign you need to confidently execute your strategy.

Avoiding the Common Pitfalls—Or, Why These Soldiers Aren’t Invincible

Now, a word of caution. The Three White Soldiers might look invincible, but entering a trade without considering resistance levels or upcoming news events is like confidently marching straight into a paintball ambush—not ideal. During the expansion phase, traders can get caught in a trap where volume spikes suddenly due to a news release or institutional orders.

Want a hidden advantage? Use support and resistance analysis to identify whether the Three White Soldiers are approaching a significant resistance level. If they’re headed towards a brick wall, no matter how strong, they’re going to struggle.

How to Use Expansion Phases and Three White Soldiers Like a Pro

1. Step 1: Look for Market Context – Before getting too excited about spotting the soldiers, determine the phase of the market. Is it expanding? If yes, then it’s time to get interested.
2. Step 2: Watch Volume Closely – Ensure that these three green candles come with expanding volume. Picture it as crowd support—the more people are cheering, the stronger the momentum.
3. Step 3: Support and Resistance Check – Map out key resistance levels to avoid getting caught in false breakouts. The soldiers might be marching ahead, but if they meet resistance, they might need to rethink their strategy.
4. Step 4: Confirm with Indicators – If you want to go a step further, pair the Three White Soldiers with other indicators like RSI or MACD to confirm that bullish momentum is gaining strength.

Insider Insight: An Unexpected Angle

Most traders look at the Three White Soldiers as a bullish pattern that’s too good to resist. The truth? Sometimes the real advantage lies in identifying when the soldiers are faking you out. During an expansion phase, not all green candles are your friends. Keep an eye on divergence—if you’re seeing the soldiers but momentum indicators like RSI are showing weakening strength, it’s time to be wary.

Case Study: Real Life Example

Take the 2021 expansion phase in the EUR/USD pair. Right after a consolidation period, the Three White Soldiers appeared, and volume began to expand. Traders who recognized this pattern early caught a strong rally. But those who failed to note the resistance at 1.2250 ended up watching their profits reverse quickly. It’s a classic example of why you need to consider the broader context.

Bringing It All Together: Avoiding Rookie Mistakes

The expansion phase and the Three White Soldiers are like your dream team—but only when used wisely. Don’t jump into trades just because you see three lovely green candles. Verify market conditions, assess volume, map out key levels, and stay alert to unexpected market events. It’s all about keeping your soldiers well-prepared before marching into action.

Elite Tactics for the Winning Edge

• Expansion Phase First: Always identify the expansion phase before getting excited about the pattern.
• Volume Validation: Use volume to verify the strength of the move—the soldiers need their backup.
• Diversify Confirmation: Use other indicators to confirm strength—never rely on a single signal.

And finally, remember: trading is a game of probabilities, not certainties. Approach it with caution, but don’t forget to enjoy the ride—after all, what’s life without a few ups and downs?

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