Three candles can help you make the right prediction: whether the chart will reverse or not. But these need to be special candles, and they also have to be found. Fortunately, this is not difficult. You just need to identify the simple figures that are formed on the chart before the reversal. We will tell you how to find them.
Three soldiers and three crows. How to conclude transactions
“Three Soldiers” is a reversal pattern on the chart when three growing candles of approximately the same size appear during a falling trend.
The appearance of the “Three Soldiers” speaks to the high probability of a reversal UP. Accordingly, we conclude transactions on increases in the price of the asset:
“Three crows” is the same, but in the opposite direction: three falling candles in a row which appear on the chart during a growing trend. The appearance of the “Three Crows” speaks to the high probability of a reversal DOWN.
Accordingly, we conclude transactions on reductions in the price of the asset:
The strategy works perfectly with indicator strategies. The profitability of transactions can be significantly increased when using, for example, the “Three Candles” + “Pathfinder for a Flat,” or “Three Candles” + “The Breath of the Market”.
The strategy is suitable for any asset, but works best with the EUR/USD and GPB/USD currency pairs.
Choose timeframes of 15S, 30S, or 1M.
Be sure to pay attention to the size of the candles and their shadows:
- The last candle, the third one, should not be much shorter than the previous ones;
- if the candles are too large, then that means the price has changed very quickly. And after rapid price changes there are rebounds to the old values, so this does not work well for trading;
- The shorter the shadows of the candles in the figure, the better;
- If the shadow is equal in length to the body of the candle, or even longer than the candle, then this is most likely not the pattern that we are looking for;
- however, do not look for figures where there are no shadows. That is the ideal situation, which is almost impossible to find.