Technical Analysis: Triple Candlestick – Definition, How it Works, Types, Calculation, and Trading

Triple candlestick patterns are a cornerstone of technical analysis, offering traders powerful insights into potential trend reversals or continuations. Comprised of three consecutive candles, these patterns help identify shifts in market sentiment and provide early trading signals.

Whether you’re analysing stocks, forex, or commodities, mastering triple candlestick formations such as the Morning Star, Evening Star, or Three White Soldiers can give you a significant edge.

What does a Triple Candlestick mean?

Triple candlestick patterns are formations made up of three consecutive candlesticks that indicate either a potential trend reversal or continuation. Traders use these patterns to forecast future price actions and adjust their strategies accordingly.

Recognising triple candlestick formations—like the Morning Star for bullish reversals or the Evening Star for bearish ones—can offer critical insights into market momentum.

How is a Triple Candlestick Pattern structured?

A triple candlestick pattern includes three clearly defined candles, each with a real body and upper and lower wicks. The body indicates the open and close prices, while the shadows show the session’s highest and lowest points.

For instance:

• Morning Star: Bearish candle → small-bodied candle (indecision) → bullish candle (reversal).
• Evening Star: Bullish candle → small-bodied candle → bearish candle (reversal).

What are the Different Types of Triple Candlestick Patterns?

• Morning Star: Bullish reversal after a downtrend.
• Morning Star Doji: Same as Morning Star, but with a Doji in the middle.
• Evening Star: Bearish reversal at the peak of an uptrend.
• Evening Star Doji: Doji in the middle signals stronger hesitation before the downtrend.
• Three White Soldiers: Bullish continuation of three strong green candles.
• Three Black Crows: Bearish counterpart of Three White Soldiers.
• Three Inside Up: Bullish reversal with confirmation by third bullish candle.
• Three Inside Down: Bearish reversal with third candle closing below the first.
• Three Outside Up: Bullish pattern confirmed by two bullish candles after engulfing bearish candle.
• Three Outside Down: Bearish pattern confirmed by two bearish candles after engulfing bullish candle.
• Identical Three Crows: Three bearish candles with similar closing prices.
• Rising Three Methods: Bullish continuation with pause candles between bullish moves.
• Falling Three Methods: Bearish continuation with pause candles between bearish moves.
• Abandoned Baby: Rare reversal pattern with gapped Doji in the middle.
• Tri-Star: Three Doji candles indicating strong reversal potential.

How to use Triple Candlestick Patterns in Technical Analysis?

1. Recognise the Pattern: Identify a known three-candle sequence such as Morning Star or Three Black Crows.
2. Analyse the Chart Context: Check overall trend, volume, and key levels.
3. Apply Technical Indicators: Use tools like RSI, MACD, and trendlines for confirmation.

What Indicators are best with Triple Candlestick Patterns?

• Moving Averages: Help identify trend direction and validate continuation/reversal setups.
• RSI: Highlights overbought/oversold zones to confirm reversal strength.
• Stochastic Oscillator: Validates signals through crossovers in overbought/oversold zones.
• Bollinger Bands: Help assess volatility and price positioning.
• MACD: Provides momentum confirmation via crossover signals.

Conclusion

Triple candlestick patterns are reliable tools for forecasting market movements and refining trading strategies. By understanding their structure and combining them with supportive indicators, traders can significantly increase their success rate.

Whether identifying bullish or bearish reversals or spotting continuation signals, triple candlestick analysis helps build a disciplined and informed trading approach.