When it comes to reading Japanese candlestick charts, recognizing triple candlestick patterns can give you a major edge in forex trading. These patterns, made up of three individual candlesticks, often serve as powerful signals for trend reversals or continuations.
Let’s dive into the most popular 3-candlestick formations and what they mean for your trades.
🌅 Morning Star & 🌇 Evening Star (Reversal Patterns)
These classic triple candlestick patterns are known for signaling major market reversals.
✅ Morning Star (Bullish Reversal)
- Appears after a downtrend.
- 1st candle: Long bearish candle (shows seller strength).
- 2nd candle: Small body (shows indecision).
- 3rd candle: Strong bullish candle closing above the midpoint of the 1st candle.
📈 Signal: A potential reversal to the upside. Buyers are taking over.
🚫 Evening Star (Bearish Reversal)
- Appears after an uptrend.
- 1st candle: Long bullish candle (strong buyers).
- 2nd candle: Small-bodied candle (pause in buying).
- 3rd candle: Bearish candle closing below the midpoint of the 1st candle.
📉 Signal: A likely reversal to the downside. Sellers are gaining control.
🕊️ Three White Soldiers & 🦅 Three Black Crows
These strong continuation or reversal patterns tell us when the market is ready to change direction with confidence.
Three White Soldiers (Strong Bullish Reversal)
- Found after a downtrend.
- Three consecutive long green candles, each closing near the high with little to no upper wicks.
💡 Tip: A clear sign that bullish momentum is building.
Three Black Crows (Strong Bearish Reversal)
- Found after an uptrend.
- Three consecutive long red candles, each closing near the low with minimal lower wicks.
⚠️ Warning: This pattern suggests aggressive selling and a shift to bearish control.
🔄 Three Inside Up & Three Inside Down
These triple candlestick formations are subtle but highly reliable trend reversal signals.
Three Inside Up (Bullish Reversal)
- Appears at the bottom of a downtrend.
- 1st candle: Long bearish candle.
- 2nd candle: Smaller bullish candle, closes above 50% of the first.
- 3rd candle: Closes above the high of the first candle.
📈 Signal: The bulls are reclaiming momentum. Prepare for an uptrend.
Three Inside Down (Bearish Reversal)
- Appears at the top of an uptrend.
- 1st candle: Long bullish candle.
- 2nd candle: Smaller bearish candle, retraces to at least 50% of the first.
- 3rd candle: Closes below the low of the first candle.
📉 Signal: Sellers are starting to dominate. Trend reversal expected.
✅ Final Thoughts on Triple Candlestick Patterns
Understanding triple candlestick formations like the Morning Star, Evening Star, Three White Soldiers, and others gives you powerful insights into market sentiment. These formations can be used in combination with technical indicators like RSI or MACD to strengthen your entries and exits.
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