A method tested personally: Last year, in less than a year, I turned an initial capital of 50,000 into 22 million. If you plan to invest in cryptocurrencies, please take a few minutes to read my answer word for word, as it may save your life and your family. Thousands of originally happy families end up broken due to pursuing such an unattainable dream of striking it rich in the cryptocurrency market. I believe I have been able to continue on the path of trading because I have always been dedicated to learning, understanding the fundamentals, analyzing news, studying technical indicators, and forming a stable, profitable trading system!

In Japanese candlestick patterns, the Three White Soldiers is a bullish reversal candlestick pattern, usually appearing at the bottom after a price drop, indicating that a price reversal may occur soon.

Since the Three White Soldiers pattern is a bullish reversal pattern, we hope to see a price drop before this pattern appears, making it a common signal for trend termination.

How to identify the Three White Soldiers pattern? The Three White Soldiers pattern is a three-candlestick pattern consisting of three consecutive bullish candlesticks, located at the bottom of a downtrend. It is the mirror image of the 'Three Black Crows' pattern. The method for identifying the 'Three White Soldiers' pattern on the chart is as follows:

Three consecutive bullish candlesticks.

The body is larger.

The shadows should be small or nonexistent; the pattern looks like this on the chart:

Therefore, to identify the Three White Soldiers candlestick pattern on the chart, you need to find three consecutive bullish candlesticks that appear at the bottom of a downtrend. Additionally, each candlestick must have a relatively long body, and the opening price must be higher than the closing price of the previous candlestick, ultimately forming a 'V' shape.

Variants of the Three White Soldiers candlestick pattern: Of course, the Three White Soldiers candlestick pattern may vary on daily trading charts. You may see a significant gap between the closing price of one candlestick and the opening price of the next, causing them to start from within each other. You will also often see the candlestick gradually shrink during its formation. It may look like this on the chart:

How to trade the Three White Soldiers candlestick pattern: Simply finding the same shape on the chart is not enough. The effectiveness of the pattern is not just about its shape but also its position. This means that the same shape appearing in different positions may imply different meanings.

When trading the Three White Soldiers, we first want to see the price drop, forming a bearish trend. The appearance of the Three White Soldiers pattern after this bearish trend may signal a reversal upwards. It looks like this:

So when should we enter based on the Three White Soldiers pattern? It's simple: you can enter the trade when the high of the last candlestick is broken. This is the trigger for you to take a conservative bullish strategy, as shown below:For stop-loss, we can set it below the first candlestick of the Three White Soldiers pattern.

Additionally, to improve accuracy, we hope to trade the Three White Soldiers candlestick pattern by combining it with other technical analysis or indicators.

Strategy for trading the Three White Soldiers candlestick pattern: Strategy 1: Use trend reversal indicators - RSI and Stochastic Oscillator. The two most effective indicators for confirming trend reversals are the Relative Strength Index (RSI) and the Stochastic Oscillator. Essentially, these technical analysis tools indicate overbought and oversold areas, which may help you identify potential reversal areas.

As seen in the AUD/USD 1-hour chart below, when the Three White Soldiers pattern appears (with RSI below 30 and Stochastic below 20), both the RSI and Stochastic are below the oversold area. This validates the candlestick pattern and provides additional signals for an upcoming trend reversal.

In the example above, traders will establish a long position after the third bullish candlestick is completed, with the stop-loss set at the lowest level of the first candlestick or below. The take-profit should be at the highest level of the previous bearish trend candlestick. Additionally, RSI divergence can be used to trade the Three White Soldiers pattern.

This differs somewhat from other trading strategies. To find a bullish RSI divergence, we want to first see the price in a downtrend, forming lower lows and lower highs.

Steps to operate:

Find the downtrend.

Mark the lows formed after each drop.

Also compare the price lows with the RSI indicator.

When you see the RSI forming higher lows while the price forms lower lows, you have found a divergence.

Wait for the Three White Soldiers pattern to appear at a lower low point, aligned with a higher low point of the RSI.

Go long when the price breaks above the high of the last candlestick in the Three White Soldiers.

Set stop-loss and take-profit targets, anticipating a price increase.

Strategy 2: Use Fibonacci to trade the Three White Soldiers. Besides using trend reversal indicators, you can also use Fibonacci retracement levels to detect potential support or resistance areas and determine if a trend reversal may occur. Fibonacci shows the retracement levels where prices often reverse. Depending on the strength of the trend, different levels may interact differently with the Three White Soldiers pattern.

Steps to operate:

The market is in an uptrend.

Then wait for the drop.

Use Fibonacci tools to draw levels from the low to the high of this wave.

When the price reaches a Fibonacci level and the Three White Soldiers pattern appears, this is a signal to wait.

Go long when the price breaks above the high of the third candlestick in the Three White Soldiers.

Set stop-loss and take-profit targets, anticipating the price will rise.

To draw Fibonacci retracement levels, you need to find a completed trend and drag it from the previous trend's lowest point to the highest point (as shown below).

Then, once the Fibonacci retracement levels are drawn, you can zoom in and look for entry levels. Additionally, you can use Fibonacci to find stop-loss positions and take-profit targets. In the example above, the entry point would be the closing price of the third candlestick (because the market trading price is above the 78.6% Fibonacci level).

Then, the stop-loss can be set at the lowest level of the first candlestick or at the 0.0% Fibonacci level (i.e., the lowest level of the previous price range). Finally, the take-profit is set at the highest level of the previous trend or below one of the Fibonacci levels.

Strategy 3: Use moving averages to trade the Three White Soldiers. Moving averages are excellent indicators for trend trading. When the price is in an uptrend, it pulls back towards the moving average.

Steps to operate:

Find the uptrend, with prices jumping above the moving average.

Wait for the price to pull back to the moving average.

Check if the Three White Soldiers pattern appears on the moving averages.

Go long when the price breaks above the high of the last candlestick in the Three White Soldiers.

Set stop-loss and take-profit targets, anticipating that the price will rise again.

Advantages and disadvantages of the Three White Soldiers candlestick pattern: Here are the most common advantages and disadvantages of trading the Three White Soldiers pattern:

In summary, the Three White Soldiers is a three-candlestick pattern. To ensure its effectiveness, it must appear after a price drop. This is a bullish reversal pattern, indicating a potential upward reversal in price. To enhance accuracy, you can use RSI, moving averages, and other trading indicators to trade the Three White Soldiers.

The win rate of the Three White Soldiers candlestick pattern is 84%. It is important to note that no trading strategy is foolproof, and sometimes, you may encounter significant market shifts when using a strategy, and the market begins to develop with strong momentum.

To ensure you can withstand appropriate risks, please lock in profits when the trend is favorable to you. Remember to test these strategies or indicators in simulated trading.

Finally, I will share my winning rules and practical tips for trading cryptocurrency:

1. Insight into market sentiment and emotion: Trading volume is an important window for observing the market. When trading volume significantly increases while the price does not drop, this often signals that the market is about to stabilize; conversely, if trading volume increases but the price struggles to rise further, it likely indicates the short-term trend has come to an end. It is important to note that trading volume behaves differently during upward and downward processes. During an uptrend, trading volume should consistently grow steadily; if there is a sudden decrease in trading volume or an unusually large trading volume, it may signal the end of the upward trend. In a downtrend, as long as volume appears at key breakout points, the downtrend is likely to continue.

2. Focus on key levels: Key levels such as resistance, support, and trend lines play an important role in indicating market trends. Whenever the price reaches these levels, it requires special attention, and decisive action should be taken. I personally prefer to use the golden ratio method to predict these key levels to assist my trading decisions.

3. Seize the time window: Different time windows serve different roles when observing market trends. The 1-minute chart is suitable for precisely finding entry and exit points; the 3-minute chart helps monitor the swing trend after entry; while the 30-minute or 1-hour chart is mainly used to observe changes in intraday trends. By reasonably utilizing these time windows, one can grasp market dynamics more comprehensively and accurately.

4. Correctly treat stop-loss: A stop-loss means the end of a trade; do not act blindly out of urgency to recover losses. Each new trade is a fresh start; do not let previous actions affect your current judgment and decision-making. Stay calm and rational to better cope with various changes in the market.

5. Clever position management and buy-sell strategies: This is a simple yet effective method that beginners can easily master and profit from. We will average our positions into three parts: when the coin price successfully breaks above the 5-day moving average, buy one part; if it continues to break above the 15-day moving average, buy another part; if it can further break above the 30-day moving average, buy the last part as well. The entire process must strictly follow this rule. If the coin price breaks above the 5-day moving average but fails to continue pushing for the 15-day moving average and instead drops, as long as it does not break below the 5-day moving average, keep the position unchanged; once it breaks below the 5-day moving average, sell immediately.

Similarly, when the coin price breaks through the 15-day moving average but fails to continue breaking through the 30-day moving average and retraces, as long as it does not break below the 15-day moving average, continue to hold; if it breaks below the 15-day moving average, sell a portion first. If the coin price successfully breaks through the 30-day moving average but then retraces, operate as described above. When selling, the operation is the opposite. When the coin price is at a high, once it breaks below the 5-day moving average, sell a portion first; if the price does not continue to fall, retain the remaining position. If the coin price sequentially breaks below the 5-day, 15-day, and 30-day moving averages, sell all without hesitation, and do not harbor any illusions that the price will rebound.

Although this method seems simple, the key lies in whether you can consistently stick to it. Once you buy, the buy-sell rules are established, and you must strictly follow the established rules to achieve relatively stable gains in this risky cryptocurrency market.

Persist in reviewing trades, summarizing and reflecting daily, and continuously optimizing strategies. Do not follow the crowd in cryptocurrency trading; find a method that suits you to stabilize your footing in the crypto market. The above is the essence of my years of cryptocurrency trading experience, shared with everyone in the hope it helps. In this vast universe, all beings travel together.

The old expert only engages in real trading; the team also has positions to enter.