“Three Soldiers with Retest” Candlestick Pattern

The Three Soldiers with Retest Candlestick Pattern

This pattern is very powerful, but rarely discussed, and not very well known. The pattern is relatively simple. It is a three candle pattern.

Below is an example of the bullish version:

1. Candle 1 – closes up
2. Candle 2 – a higher low and a higher high
3. Candle 3 – breaks the low of candle 1, closes up and above the close of Candle 2

This is an example of the bearish version:

1. Candle 1 – closes down
2. Candle 2 – a lower high and a lower low, closes down
3. Candle 3 – breaks the high of candle 1, closes down and below the close of Candle 2

You do not see this pattern discussed much, but it has been a well-known pattern to watch out for among the professional trading community for a long time, having been documented in publications as early as the 1970s.

The reason why this is a powerful pattern is because it shows building bullishness or bearishness in terms of momentum, coupled with a failed test of the opposite low or high. These patterns often have built-in “2B failed breakouts”, which is a key part of Forex market structure.

Candlestick Pattern Back Test

Let's perform a back test on the recent history of this pattern on the major currency pairs to see how effective this pattern really is. It makes sense to look at a relatively high time frame, but one that can provide plenty of examples, so the H4 chart is suitable. Entry will be made immediately upon the close of the third candle, with an exit after one single candle.

The results of a recent five-year back test on the four major Forex pairs are as follows:


When you see this pattern in an area where you are looking for a trade, you can take this as a good and probable confirmation that the price is about to move in the direction that you are anticipating.