One White Soldier Candlestick Pattern: Backtest Results

The One White Soldier is a bullish reversal candlestick pattern that typically occurs at the end of a downtrend. It consists of a single white candle that opens below the closing price of the previous day and closes above the opening price of the previous day. The pattern suggests that buyers are in charge of the market and that a downtrend reversal is likely to happen.

The One White Soldier pattern is particularly strong when it appears after a period of protracted selling, and it implies that a trend reversal might be likely. An additional consideration is candle size; the bigger the candle, the more significant the reversal is likely to be.

By watching for the opening of the following day’s trading to be higher than the closing price of One White Soldier, traders frequently seek confirmation of the pattern. This demonstrates that the trend is changing and that the bullish momentum is still present.

One White Soldier Candlestick Pattern Backtest

The One White Soldier is pretty easy to determine. Hence, you can easily backtest it.

We recommend backtesting all your trading ideas – including candlestick patterns.

To backtest candlestick patterns, you need to set specific rules and definitions. That requires time and effort, but don’t worry: it’s already done for you!

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How to Recognize One White Soldier Candlestick Pattern

The One White Soldier candlestick pattern is fairly simple to recognize. The One White Soldier pattern is a reversal pattern that often appears towards the end of a downturn, therefore look for one. Keep an eye out for a long-lasting downtrend that has a string of red or bearish candlesticks.

Look for a single white or green candlestick that has an opening price that is lower than the previous day’s closing price and a closing price that is higher.

The body of the candlestick should be lengthy, with little to no upper and lower shadows. The more substantial the reversal is anticipated to be, the larger the white candlestick. The white candlestick should ideally be bigger than the candlestick from the previous day.

Wait for the opening of trade the following day to be higher than the closing price of One White Soldier. This demonstrates that the trend is changing and that the bullish momentum is still present.

In a chart, the pattern looks like this:

One White Soldier pattern
One White soldier pattern backktest

Important Features

Many characteristics define the One Whote Soldier Candlestick Pattern.

For example, the Single Candlestick pattern suggests that a single white or green candlestick forms the One White Soldier pattern during a decline.  Also, the pattern is known as a bullish reversal pattern, and it suggests that the trend may be shifting from bearish to bullish.

Moreover, the white candlestick’s opening and closing prices should be lower than the previous day’s closing price and higher than the prior day’s opening price, respectively. The body of the white candlestick should be lengthy, with little to no upper and lower shadows. The more significant the reversal is anticipated to be, the bigger the white candlestick. The white candlestick should ideally be bigger than the candlestick from the previous day.

Volume might be crucial in determining the One White Soldier pattern’s strength. On the day of the white candlestick, the volume rises, indicating strong purchasing pressure. Lastly, traders should watch the trading the next day to see if the pattern is confirmed. One White Soldier’s closing price ought should be greater than the subsequent day’s opening price, showing that the positive momentum is still present.

Concept Behind One White Soldier Pattern

Traders can more accurately assess the One White Soldier Pattern’s significance by comprehending the psychology underlying it. When the market is in a downturn, there is a negative mood, and sellers control the market. The red or bearish candlesticks that predominate on the price chart show this negativity. However, the market may start seeing buyers at some time during the slump, leading to a bullish reversal.

The One White Soldier pattern depicts a situation in which buyers are in charge of the market and driving up prices. The lone white or green candlestick that appears on the price chart, which denotes that buyers are willing to pay more than the closing price of the previous day, reflects this.

One White Soldier’s psychology is influenced by a number of things, such as:

Market sentiment and increasing buying pressure. The One White Soldier pattern’s emergence can indicate a change in sentiment from pessimistic to positive. Numerous things, like good news or earnings reports, a shift in market attitude, or a new market trend, might cause this adjustment. The One White Soldier pattern can also signify an uptick in demand as consumers grow more optimistic about the market’s potential for expansion. This escalation in buying pressure may give the market more time to move in the bullish direction.

How One White Soldier Candlestick Pattern Can be Leveraged in Technical Analysis

The following are some applications of this pattern in technical analysis:

  1. Trend reversal: Bullish reversal pattern that generally comes at the end of a downturn is the One White Soldier pattern. This pattern can be used by traders to spot probable trend reversals and place long positions as the market turns bullish.
  2. Confirmation of trend reversal: One White Soldier patterns are frequently utilised in conjunction with other technical indicators to confirm impending trend reversals. To verify the One White Soldier pattern’s veracity, traders may search for further bullish signals, such as a break above a trendline or moving average.
  3. Stop-loss placement: Trading strategies for risk management include using the One White Soldier pattern to place stop-loss orders. Trades can be abandoned with little loss if the market does not confirm the pattern.
  4. Price targets: Price targets can also be established for long positions using the One White Soldier pattern by traders. Setting a target price might be guided by the magnitude of the white candlestick, with larger candles denoting a stronger bullish emotion.
  5. Trading strategies: The One White Soldier pattern can also be utilised in conjunction with other trading techniques, such as a breakout strategy or a bullish engulfing pattern. To find prospective trading opportunities, traders may combine the One White Soldier pattern with additional patterns and indicators.

Key Trading Strategies for One White Soldier Candlestick Pattern

Traders can use several popular trading strategies when they spot the One White Soldier pattern. The Trend Reversal Strategy entails spotting a downward market trend and watching for the One White Soldier pattern to emerge as a potential reversal indicator. After the pattern is visible, traders can open a long position with a stop loss below the pattern’s low. A trailing stop loss or a specific resistance level can be used to set the target profit.

For the Confirmation Strategy, other technical indicators, like moving averages or trendlines, are used as confirmation signals for the One White Soldier pattern. Traders might search for further bullish signs after the pattern forms to verify the likely trend reversal. Next, based on the further bullish signs, they can open a long trade with a stop loss below the pattern’s low and a target profit.

The Breakout Strategy entails watching for the One White Soldier pattern to manifest within a trading range or consolidation. When the price breaks out of the trading range after the pattern forms, traders can open a long position with a stop loss below the pattern’s bottom and a target profit based on the size of the trading range.

In the moving average strategy, the One White Soldier pattern is combined with a moving average crossover. After a bearish crossover of the moving averages, traders can watch for the One White Soldier pattern to develop. If the pattern is visible, traders can take a long position with a stop loss below the pattern’s low and a profit objective based on the moving averages’ bullish crossover.

In the Volatility Breakout Strategy, the One White Soldier pattern is used as a warning indicator for a probable volatility breakout. After the pattern is visible, traders can take a long position when the price moves outside of the most recent trading range. The target profit will depend on the size of the trading range and the anticipated volatility, and the stop loss will be set below the pattern’s bottom.

How Does The One White Soldier Candlestick Pattern Compare Against Other Candlestick Patterns

Here are some differences between the One White Soldier pattern and other popular candlestick patterns:

  1. Bullish Engulfing Pattern: Similar to the One White Soldier design, the Bullish Engulfing pattern has two candlesticks instead of one. A bearish candlestick appears initially, followed by a larger bullish candlestick that totally engulfs the bearish candlestick that came before it. While it depicts a more definite shift in market mood, the Bullish Engulfing pattern is a stronger reversal pattern than the One White Soldier pattern.
  2. Hammer Pattern: A bullish reversal pattern with a small body and a large lower shadow is the Hammer pattern. The pattern reveals that although bulls ultimately intervened and drove prices up, bears were still able to push prices lower during the session, leaving a significant lower shadow. Compared to the One White Soldier pattern, the Hammer pattern is frequently regarded as a stronger bullish reversal indicator.
  3. Morning Star Pattern: A potential bullish reversal is indicated by the Morning Star pattern, which is a three-candlestick pattern. It consists of a long bearish candlestick, a small candlestick indicating uncertainty, a large bullish candlestick that totally engulfs the prior bearish candlestick, and then a small candlestick. Although it depicts a more dramatic shift in market mood, the Morning Star pattern is a stronger reversal indication than the One White Soldier pattern.
  4. Doji Pattern: A candlestick pattern known as the Doji signifies market uncertainty. Its short body and extended upper and lower shadows show a standoff between bulls and bears. The Doji pattern may indicate a probable reversal, but other technical indicators or candlestick patterns must corroborate it.

What Are The Limitations of One White Soldier Candlestick Pattern?

Although the One White Soldier candlestick pattern might give traders useful information, it does not guarantee a positive reversal. Like any other technical analysis tool, the One White Soldier pattern is prone to false signals. When the bullish reversal is absent, the pattern may still manifest. For instance, the pattern could show up in a market that is trading sideways or one that is anticipated to experience a brief uptick before continuing to decline.

As a reversal signal, the One White Soldier pattern is less potent than some other candlestick formations. Additional technical indicators or candlestick patterns must corroborate the pattern to boost the likelihood of a positive reversal.

The One White Soldier pattern offers details on only one session. It doesn’t give any details on the general market trend or mood. Several technical analysis techniques can help traders better grasp the state of the market. Also, the One White Soldier should not be the only trading indicator used by traders. They should combine this pattern with other technical indicators or candlestick patterns to validate the probable reversal and make wise trading decisions.

Real-World Examples of How Companies Used One White Soldier Candlestick Pattern

There are several real-world examples of One White Soldier candlestick patterns. For instance, Tesla’s stock price had been in a downward trend in June 2020 until a One White Soldier candlestick pattern appeared on May 14th. A powerful bullish surge that lasted for several sessions followed this pattern. The One White Soldier pattern’s potential as a reversal signal was demonstrated well in this case.

Similarly, Apple’s stock price had been in a downward trend in February 2020, but on February 11th, a One White Soldier pattern emerged. The bullish impetus, nevertheless, was short-lived because the stock price soon resumed its downward trend. This illustration demonstrates the One White Soldier pattern’s limitations as a standalone trading indication.

The stock price of ExxonMobil had been declining in October 2020, but on October 30th, a One White Soldier pattern emerged. A little rally occurred following this pattern, but the stock price kept going down after it. This illustration highlights how crucial it is to use the One White Soldier pattern in conjunction with other technical indicators and analysis tools in order to make well-informed trading decisions.

Finally, the price of Facebook’s shares had been falling throughout May 2021, but on May 14th, a One White Soldier pattern emerged. A powerful bullish surge that lasted for several sessions followed this pattern. The One White Soldier pattern can serve as a bullish reversal indication, as demonstrated by this example.

One White Soldier Candlestick Pattern in Different Timeframes

From short-term intraday charts to long-term monthly charts, numerous timeframes can be used with the One White Soldier candlestick pattern. The One White Soldier pattern may show up on a stock’s 5-minute chart as a positive reversal indication. The pattern may signal a potential short-term bullish rally if it comes following a downtrend.

Regarding daily charts, the One White Soldier pattern on a daily chart can be used to spot probable trend reversals. During a protracted slump, the pattern may signal a potential bullish turnaround. Before making any trading moves, traders should use additional technical analysis tools to verify the reversal.

Similarly, the One White Soldier pattern on a weekly chart can be used to spot probable medium-term bullish reversals. It may be a sign of a probable bullish reversal that could endure for several weeks or months if the pattern develops following a protracted downturn.

The One White Soldier pattern on a monthly chart can be used to spot probable long-term bullish reversals. It may be a sign of a future bullish reversal that could endure for several months or even years if the pattern develops following a protracted downturn.

But when all is said and done, we believe the daily time frame is best for candlesticks:

Conclusion

In conclusion, traders may find the One White Soldier candlestick pattern to be a handy tool for spotting future bullish market reversals. To validate the pattern and make wise trading decisions based on unique risk management plans and trading objectives, it is crucial to apply additional technical analysis tools.

FAQ:

How can I recognize the One White Soldier pattern?

Trader should Look for a single white or green candlestick with an opening price lower than the previous day’s closing price and a closing price higher than the prior day’s opening. The body of the candlestick should be lengthy, indicating a significant reversal, and ideally larger than the candlestick from the previous day.

How do I backtest the One White Soldier pattern?

Backtesting the One White Soldier pattern involves setting specific rules and definitions. It is recommended to backtest all trading ideas, including candlestick patterns, by defining rules, settings, statistics, probabilities, and performance metrics.

How does the One White Soldier pattern compare to other candlestick patterns?

The One White Soldier pattern is a bullish reversal pattern, and its strength is compared to patterns like Bullish Engulfing, Hammer, Morning Star, and Doji. While similar, each pattern has its own characteristics and indicates different levels of bullish reversal strength.

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