Candle Patterns Part 3: Reading Reversal Scenarios with Three-Candle Patterns

In Part 1 we studied single candles,
and in Part 2 we moved to two-candle patterns:

Long wicks, large candles, dojis
Inside bars, engulfing patterns, tweezers

and treated them as compressed stories of one or two shifts in control.

In this third part, we zoom out again and ask:

“How do three candles summarize
an entire reversal scenario?”

💡 On your first read, it’s enough to keep just three ideas in mind:

Morning star: at the end of a downtrend near support,
“selloff → hesitation → strong bounce” compressed into 3 candles

Evening star: at the end of an uptrend near resistance,
“rally → hesitation → strong push back” in 3 candles

Three-candle trend patterns:
three candles in the same direction show
how strongly the trend is concentrated on one side

1. Three-candle patterns we’ll cover

In this part we’ll focus on four classic patterns:

Morning star
→ A three-candle bullish reversal at the end of a downtrend
Evening star
→ A three-candle bearish reversal at the end of an uptrend
Three White Soldiers (three bullish candles)
→ A sequence where buying pressure is strongly concentrated
Three Black Crows (three bearish candles)
→ A sequence where selling pressure is strongly concentrated

As before, the names are less important than the storyline:

In what order does the reversal play out?
Where does the pattern form relative to
support and resistance and
swing vs correction?

2. Morning star: “selloff → pause → bounce” in three steps

A morning star is a classic
three-candle bullish reversal pattern at the end of a downtrend.

The typical structure:

First candle
- A relatively large bearish candle
- Often the climax leg of the prior downswing
Second candle
- A small-bodied candle (doji, small bar, etc.)
- More indecision/balance than clear direction
Third candle
- A strong bullish candle that retraces
  much (or all) of the first candle’s body

2-1. Morning star psychology

Seen as a whole, the three candles often show:

Acceleration down (candle 1)
- Sellers make a final strong push lower
Energy fade and hesitation (candle 2)
- Easy downside is gone
- Some buyers see value and begin to step in
Shift in control (candle 3)
- Sellers fail to extend lower
- Buyers take clear control and push price back up

In other words, a morning star is:

“The move from selling pressure to balance
to buying pressure in three snapshots.”

2-2. Where morning stars matter most

Morning stars gain weight when they appear:

Near higher timeframe support
Around previous swing lows or range lows
In the late phase of an extended downswing

Adding the volume analysis lens:

Candle 1: downside acceleration with rising volume
Candle 2: contracting volume on a doji/small candle
Candle 3: expanded volume again on a strong bullish candle

This often marks an area where
forced selling meets committed buying.

2-3. Limitations and pitfalls

Morning stars in the middle of a range
are often just noise.
In strong bear trends,
a morning star may lead to a short bounce
that fails at the next resistance and then rolls over again.

👉 Key point:
A morning star is a bullish shift in control scenario,
not a guarantee that “this is the final bottom.”

3. Evening star: “rally → pause → push back” in three steps

The evening star is the mirror image of the morning star:
a three-candle bearish reversal pattern at the end of an uptrend.

Its structure is symmetric:

First candle
- A relatively large bullish candle
- The climax leg of the prior upswing
Second candle
- A small-bodied candle (doji, small bar, etc.)
- The market hesitates: “Do we really want to buy higher?”
Third candle
- A strong bearish candle that retraces
  much (or all) of the first candle’s body

3-1. Evening star psychology

An evening star typically captures:

Acceleration up (candle 1)
- Buyers push hard and extend the rally
Doubt and balance (candle 2)
- New buying dries up
- Profit-taking and new selling start to appear
Control reversal (candle 3)
- Sellers respond strongly
- Price is pushed back into or through the first candle’s body

It describes the process where demand weakens
and supply takes over near the top of a move.

3-2. Where evening stars are significant

Evening stars are more meaningful when they form:

Near higher timeframe resistance
Around prior swing highs or all-time highs
After multiple completed upswings
(late stage of an advance)

From the volume analysis view:

Candle 1: rally plus rising volume
Candle 2: lower volume on a small candle
Candle 3: strong bearish volume on the reversal

This suggests that profit-taking and new shorts
are active at that level.

3-3. Limitations and pitfalls

Evening stars away from clear resistance
may only mark short-term pullbacks.
In strong bull trends,
an evening star can be followed by a correction
and then a fresh breakout to new highs.

👉 Key point:
An evening star is a bearish control reversal scenario,
not proof that “this is the ultimate top.”

4. Three-candle trend patterns: concentrated directional strength

Next we look at three-candle trend patterns:

Three White Soldiers (three bullish candles)
Three Black Crows (three bearish candles)

The core idea is simple:

“Three consecutive candles
are all pointing in the same direction.”

4-1. Three White Soldiers (three bullish candles)

Definitions vary, but the essence:

Three bullish candles in a row
Each close is above the previous close
No large upper wicks that aggressively reject the move

Three White Soldiers pattern with three consecutive bullish candles closing progressively higher

The message:

“For three consecutive periods,
buyers kept control with minimal pushback.”

It tends to be more meaningful when:

It follows a prolonged decline or
choppy action near range lows
It appears just above higher timeframe support
as the first sustained push up

4-2. Three Black Crows (three bearish candles)

Three Black Crows is the bearish counterpart:

Three bearish candles in a row
Each close is lower than the previous close
No strong lower wicks showing aggressive buying

Three Black Crows pattern with three consecutive bearish candles closing progressively lower

It is especially interesting when:

It appears after a long advance
It forms near higher timeframe resistance
It reflects profit-taking plus new selling
across several candles

4-3. The trap: sometimes it’s already late

Three-candle trend patterns show strength,
but that cuts both ways:

They often appear near the end of a move.
In leveraged markets, “three strong candles in a row”
can lure in late entries that become the last buyers or sellers.

On the other hand, when they appear:

Early in a new swing, or
Just after a clean break from a range,

they can signal that a fresh trend may be starting.

👉 Key point:
Three-candle sequences = clear directional strength,
not automatically “the safest place to enter.”

5. Reading three-candle patterns in full context

Three-candle patterns still follow the same logic
we built in Chart Basics:

Combine them with:

Examples:

A morning star on the 1-hour chart
might compress into a single long lower wick on the daily.
Three strong 15-minute bullish candles
might barely register as a modest candle on the 4-hour chart.

In the opposite direction:

A daily morning star may decompose, on lower timeframes,
into a cluster of small engulfing patterns, inside bars, and tweezers.

6. Using three-candle patterns as risk references

In practice, the key question is always:

“At what price level do I consider this idea invalid?”

Three-candle patterns can help define that line.

Morning/evening stars
- Use the most extreme high/low across the three candles
  as a candidate invalidation zone.
Three White Soldiers / Three Black Crows
- Use either the opposite side of the first candle
  or the extreme of the third candle as a reference.

The exact stop distance and position size
belong in Risk Management,
but using pattern extremes as reference points
helps you design logical stop locations.

👉 Think of patterns as
reference frames for risk,
not as automatic green lights.

7. Next steps: moving on to complex patterns

To recap:

Morning & evening stars
→ Three-step scenarios where a trend moves
from trend → balance → reversal
Three White Soldiers / Three Black Crows
→ Sequences where strength is concentrated
in one direction over three candles

In Part 4: Complex Patterns we’ll:

Look at realistic bases and tops near key levels
Focus on areas where multiple small patterns blend into
messy but meaningful reversal structures

And we’ll keep reinforcing the same idea:

Patterns are not just names for shapes—
they are short labels for specific situations and battles
playing out in the market.