If previously there was a single pattern and double pattern, this time we will discuss the triple Japanese candlestick pattern which is a reversal signal in a trading session that is experiencing trending, namely an uptrend or downtrend.
Evening and Morning Star
Both candlesticks are a type of triple candlestick pattern that we can usually meet at the end of a trending session trading. They are a reversal signal that we can know from all three characteristics. As one example is the evening star as shown by the following picture.
- The first candlestick is a bullish candlestick that is part of an uptrend candle.
- The second candlestick has a small body shape indicating no winner in the session. This candlestick can be bullish or bearish.
- The third candlestick is a signal of confirmation that a reversal of the market trend occurs within the trading session. And the price closes below half the range of the first candlestick price.
Three White Soldiers and Three Black Crows
Three white soldiers are formed when a long bullish candle is formed after the end of the downtrend trend while indicating that a reversal signal starts to occur. This candlestick type is believed to be a strong signal of a reversal towards the uptrend after a downtrend trading session that occurs for a long time and or at a consolidation session.
The first candlestick is called a reversal candle which ends the downtrend or conduction session that has begun to end.
The second candlestick must be larger than the second candlestick body and also the closing price is close to its highest price or it can be said almost or does not have a tail above its body.
The third candlestick has the same shape as the second candlestick and or has no tail at all.
Three black crows are the same as the three white soldier but only the location is different. This signal is present as a signal of a reversal of the uptrend trading session into a downtrend trading session.
The second candlestick must have a larger body than the first candlestick with the closing price closer to the lowest price. While the third candlestick formed has the same body shape as the second candlestick and or does not have a tail at all.
Three Inside Up and Down
Three inside up is a trend reversal that can be found at the bottom of a trading session downtrend. This three candlestick formation indicates that a downtrend trading session is likely to end soon and an uptrend trading session will begin to take shape. Following are the characteristics of the reversal pattern:
- The first candlestick is found in the bottom downtrend and has the characteristic long bearish candlestick.
- The second candlestick is closed at least more than half of the first candlestick.
- The third candlestick closes above the highest price of the first candlestick to confirm that the buying trader is in control of the trading session and is able to reverse a downtrend trading session.
Three inside down is the opposite of three inside up which is a trend reversal that can be found above a trading session uptrend. This formation indicates that the uptrend trading session is coming to an end and a new downtrend session will begin immediately. A three inside down must have the following characteristics:
- The first candlestick is found above the uptrend trading session in the form of a long bullish candlestick.
- The second candlestick closes at least below half of the first candlestick.
- The third candlestick closes below the first candlestick’s low to confirm that sellers are in control of the trading session and can reverse the uptrend session to a downtrend.
Above are various candlestick patterns which can be used as a reference to predict trading sessions to determine the right position.