What are the triple candlestick patterns?

As the name suggests, triple candlestick patterns are those that have a total of three candlesticks. They are often used to predict the next behavior of currency prices. There are two types of triple candlestick patterns.

Evening and Morning Stars

This candlestick pattern usually occurs at when a particular trend is ending. They are reversal patterns because they show the end of one trend and the start of another.

The Evening Star occurs when the Japanese candlestick pattern is reversing from an uptrend to a downtrend as shown in the figure above. The following occur in this pattern:

  • The first candlestick is bullish, indicating part of a recent trend.
  • The body of the second candlestick is very small, showing indecision of investors in the market.
  • The third candlestick confirms a reversal of the previous trend as it closes way below the first candlestick.

On the other hand, the morning star occurs when the downward trend is reversed to an upward trend. The three candlesticks of a morning star show the following:

  • The first Japanese candlestick is black and bearish, which is part of the recent downward trend.
  • The second candlestick is small, showing push and pull between buyers and sellers.
  • The third candlestick confirms that the buyers have won the tuck of war, and so the market is reversing to an upward trend.

Three White Soldiers and Black Crows

These Japanese candlestick patterns also demonstrate the reversal of a recent trend.

The Three White Soldiers is a candlestick pattern that is noticeable when three bullish candlesticks occur after a recent downtrend. Its first candlestick is the reversal candlestick, and the one that follows must be bigger and close near its high to confirm the reversal. The third candlestick should have a small or no shadow and it should be equal or bigger in size with the first for the pattern to be completed.

The Three Black Crows pattern is the opposite of the Three White Soldiers as it confirms the reversal of a bullish trend.

Three Inside Up and Down

The Three Inside Up candlestick pattern occurs at the bottom of a candlestick as the market trend reverses from a downward to an upward movement. On the other hand, the Three Inside Down candlestick occurs when at the top of a bullish trend as the trend reverses to a downtrend.

In the Three Inside Up candlestick,

  • The first candlestick is right at the bottom of the chart, and has a long bearish Japanese candlestick
  • The second candle should go at least as far as the middle of the first candle, and
  • The third candlestick ought to have a closing price up above the first candlestick’s highest price to confirm a reversal.

In the Three Inside Down candlestick pattern,

  • The first candle needs to be bullish candlestick located right at the top of a bullish trend
  • The second candle should go as far down as at least the midpoint of the first candlestick, and
  • The third candlestick ought to close at a price lower than the lowest price of the second candlestick.

Leave a Reply

Your email address will not be published. Required fields are marked *