Ji Xin's three white soldiers capturing limit-up strategy, the core points of the 'Three White Soldiers Capturing Bull Strategy'!
1. What are the Three White Soldiers?
In simple terms, it refers to a stock closing with three consecutive large bullish candles without any shadows, resembling three soldiers standing side by side. This pattern indicates:
The bulls completely crush the bears, with buyers competing to buy every day, resulting in almost no pullbacks, and a clear rush for funds.
2. Application Conditions
To use this strategy to capture limit-ups, three prerequisites must be met:
Position must be low: It should appear at the bottom after a long-term decline or at a breakout position after a sideways consolidation,Volume matching: The three bullish candles should have increasing volume, especially the third day must see explosive volume,Sector linkage: It’s best if the entire sector is rising, indicating a collective market trend rather than individual stocks dancing alone.
3. Practical Techniques
Entry Timing: Aggressive: Chase directly before the close of the third bullish candle.
Conservative: Wait for the fourth day to pull back to the 1/3 position of the third bullish candle to buy low (similar to the 'Three Outside Up' pattern).
Stop-loss Setting: Exit if the price falls below the lowest point of the third bullish candle.
Take-profit Strategy: Reduce positions when a high position doji appears or a large bearish candle occurs, and completely liquidate if it breaks below the 5-day moving average.
4. Special Attention
False Breakout Trap: If the bodies of the three bullish candles are getting shorter and the volume is shrinking, it is likely a false signal to entice buyers.Market Environment: This pattern often fails in bear markets, with a higher success rate in bull markets.Don’t be Greedy: After three consecutive large bullish candles, the probability of a short-term pullback exceeds 70%; don't expect to catch the entire fish after spotting the fish's body.
Summary of Key Points
Low position with three bullish candles accumulating volume, sector follow-through is a prerequisite.
The three-day increase should not be too fierce; look for timing when limit-up starts.
Be decisive with stop-losses; hold on until the 5-day moving average is breached.
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