The Secret to Spotting “Three White Soldiers” on the EURAUD Chart Before the Herd Notices

Picture this: You’re sipping your coffee, scrolling through your EURAUD chart, and suddenly… there they are. Three white soldiers, marching confidently across the screen. Unlike a tragic sitcom plot twist, you’re not left scrambling to press the right button—because you know exactly what these soldiers are up to. And today, I’m going to show you how to make these three amigos your personal Forex allies.

Why Most Traders Overlook the EURAUD “Three White Soldiers” Pattern (And How You Can Get It Right)

Here’s the harsh truth: Most traders spot a pattern, get overly excited, jump in like they’re late for a sale on designer shoes, and then wonder why they got trampled. The three white soldiers pattern is a powerful bullish reversal, signaling that a downtrend is about to turn into a rally—but it’s not as simple as seeing three green candles and buying.

You need to understand the context of the pattern, especially when dealing with a less volatile pair like EURAUD. This isn’t just any currency pair—it’s a notoriously moody one, like your cousin who can’t decide whether to show up for the family reunion. When the three white soldiers appear, it’s about understanding the underlying sentiment that has shifted. So let’s break it down without the sitcom-worthy trading blunders.

The Hidden Formula to Understand Market Sentiment Behind EURAUD’s “Three White Soldiers”

To master this pattern, you need to think like a detective. Imagine you’re Sherlock Holmes, analyzing the clues left by the market. The three white soldiers pattern consists of three consecutive bullish candles, each closing progressively higher. Now, these aren’t just any random candles—they symbolize the persistence of bullish sentiment, and, when observed in EURAUD, these candles are a cue that institutional traders are on a bullish binge.

But before you break out your wallet, there’s a key rule that I call the “Momentum Cross-check.” Don’t just look at these three candles in isolation—they need to be formed after a significant downtrend and should ideally close above a major resistance level. And here comes the ninja tactic: watch out for volume. An uptick in volume during these sessions indicates that there’s real buying interest, not just a head-fake.

The Forgotten Strategy to Avoid Pitfalls in EURAUD Trading

The biggest mistake traders make? Treating EURAUD like EURUSD. Spoiler alert: it’s not. The EURAUD pair is heavily influenced by the European Central Bank and the Reserve Bank of Australia, and market sentiment can swing wildly based on policy changes. The trick is to be wary of news releases from both regions. When the “Three White Soldiers” form in EURAUD, timing is everything.

Consider the “Morning Cheer” approach—a little trick I use to check news releases from Europe and Australia before jumping into the pattern. If the news aligns with a stronger euro outlook and the three white soldiers are lining up, you’re in good shape.

How to Ride the Momentum: From Entry to Exit Without Getting Stuck

Alright, let’s talk entry strategy. When the three white soldiers appear, your entry point should be at the open of the fourth candle. Why? Because this helps confirm the continuation of the bullish trend and minimizes the risk of a fake-out. Place your stop loss below the low of the first soldier. Yes, the first soldier. He’s the leader, after all. Protecting your trade with a good stop loss helps you avoid losses when the trend goes against you.

And here’s where it gets even more ninja—your take profit should be set with a ratio of at least 1.5 to 2 times your risk. This ensures you capture the upside while limiting potential losses. Better yet, if you want to be a little cheeky (in a smart way, of course), keep an eye on the Relative Strength Index (RSI). If the RSI hits the overbought region, you might want to consider scaling out. Remember, even the best soldiers need a breather.

The Sneaky Use of Divergence to Confirm “Three White Soldiers”

Divergence is your secret weapon when trading three white soldiers. But here’s where you go from “regular trader” to “ninja trader”: watch for divergence between the price and RSI or MACD. If the price is making higher highs (soldiers are marching) but the RSI is falling, it could indicate that the bulls are running out of steam. This is a great way to keep yourself from becoming the person buying high, only to sell lower—kind of like that guy who hoarded fidget spinners just before they became uncool.

How to Outsmart Most Traders Using the Volume Tactic

Three white soldiers are one thing—but volume is what makes them formidable. Think of volume as your inside source. If the volume is increasing as the pattern forms, it’s like getting a VIP pass to the trend. However, if the volume isn’t confirming the strength, you could be looking at a bull trap.

Here’s the twist: instead of just observing the volume bars, compare them against the Volume Weighted Average Price (VWAP). If the candles are forming above the VWAP with decent volume, it’s a strong signal that institutional money is in play. Remember, the institutions aren’t there to mess around—they’re in it to win it. And you, dear trader, can ride their coattails to glory.

Advanced Insights: Avoiding the Classic Overtrade Trap

Now, I get it—you see three white soldiers, and you think you’ve hit the jackpot. But if there’s one thing you learn in Forex, it’s that discipline beats impulsiveness every time. The EURAUD can be tricky, and the pattern doesn’t always mean you should go all-in.

Here’s a contrarian piece of advice: don’t always trust the fourth soldier. Wait for a small retracement before jumping in. Many traders are too eager, buying the breakout only to watch the market pull back. Instead, if you wait for the price to retrace 50% of the third candle, you’re likely to enter at a better level.

Wrapping It All Up: From Signals to Profits

So, there you have it—the three white soldiers pattern, decoded. Spotting this pattern on EURAUD isn’t just about identifying three bullish candles. It’s about understanding the bigger picture—the market sentiment, the context, and the nuances that most traders miss. With ninja tactics like analyzing volume, using divergence as a guide, and being cautious with news, you can turn these soldiers into a winning trade.

And remember—trading is as much about managing your emotions as it is about finding the perfect entry. When you’re sipping that coffee, watching your three soldiers marching up the battlefield of your chart, smile and remember—you’ve got more than just a pattern. You’ve got a strategy.

Takeaways for the Brave and Bold

• Volume and VWAP are your best friends: Confirm the strength of the three soldiers with these indicators.
• Wait for Retracement: Avoid chasing the pattern. Let it come to you for a better entry.
• News and Timing: Keep an eye on economic releases—EURAUD loves a good surprise.

Happy trading, and may your soldiers always be marching onward and upward!

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