Buying using the “3 candles” Forex trading strategy. Three candle strategy for binary options

Hello everyone, dear readers and site visitors! In this article we will look at very interesting topic, namely: strategy 3 candles for binary options, I immediately recommend that you familiarize yourself with it (this is a completely different system based on Price Action). In general, this system is quite well known.

What can I say, the system is really interesting, and if you approach the trading process with all responsibility, it will provide an opportunity to make good money on Forex and trading options. I want to warn you right away that the presented system implies represents quite aggressive trading(lately I am for Aggressive)

That is, we will trade options for 60 seconds (strategy 3 candles 60 seconds), I think there is no need to explain that this type of trading is very risky. So be prepared for what's possible. a large number of losing trades.

In general, the rules of the trading system are very simple, but the strategy, due to its aggressiveness, can put emotional pressure on the trader. Also, given the fact that we are using a very low interval, you will have to for a long time spend behind the monitor screen.

This trading system is quite easy to use. It is noteworthy that I am not presenting to you the standard version of this strategy that others offer. I found an improved version, and, in my opinion, it works better, as they say, in combat conditions.

I watched the system for some time, and I can say that it gives very good signals.

But here it is worth understanding that you need to wait for clear signals, that is, if at least one indicator does not confirm the direction of the transaction, then you cannot open a position.

Many beginners get caught in this, they really want to trade as often as possible. But, understand, we don’t need to do this; we need to pursue more the quality of trading signals, but not their quantity.

Look

One high-quality trade will bring much more benefit than a hundred thoughtless entries. This is especially true for this system, the number of signals will be really large, but we need to wait only for obvious entry points, otherwise, be prepared for a huge amount of losses.

Entry points and indicators for the strategy - Three candles

As I said earlier, in the article we analyze a modified version of the 3 candlestick strategy for binary options (this is all suitable for Forex trading, all signals are in), and some indicators have been replaced. So, first of all, the NB Channel indicator was added.

It automatically draws us a certain channel, and when the price touches the boundaries of this channel, we can count on some kind of rebound. In this case, you can pay attention to the direction of the channel itself. Let’s say if the channel is clearly directed to , then it makes sense to look exclusively at call options.

The fact is that at the time the second candle is formed, the arrow may redraw, which is why we enter from the third candle. That’s the problem with inexperienced users: they try to enter from the second candle, supposedly to catch the very peak.

But at the same time they forget that the price can fall in one direction for a long time. By the way, we have before us a rare example of a trading system that will work best, but fail during a trend.

Roughly speaking, if the price moves strongly in one direction, then even good signals may appear, but they will not work against the priority trend. This is where serious problems will appear.

Download

Of course, if there are all the prerequisites that a clear price trend is beginning to emerge in the market, then it would be advisable to completely abandon any action, as they say, out of harm’s way.

In general, you can try to use the system during the period when the market is calmest, but make sure that the broker does not underestimate potential payments on transactions.

As for which we can use, there are no restrictions at all, but I would still recommend using the main currency pairs to a greater extent.

But here we have simply a reference signal when it was possible to purchase a put option. Well, let's start with the fact that we have an arrow, and the price clearly touches the channel border.

In addition, the second signal candle confirmed our entry point, but the arrow itself did not redraw. As for RD COMBO, its histogram not only touched an important level, but also changed its color to green. Ultimately, the minute option would work out just fine.

conclusions

In my opinion, this is one of the most interesting systems created for trading minute options. In general, I would not recommend such aggressive trading at all, but all felt-tip pens have different tastes and colors.

Try to use this strategy wisely, as it is quite aggressive and tires the trader. The main thing is to wait for good signals!

I hope the material was useful to you, thank you for your attention, dear friends!

Currently, investors who are interested in the possibility of making money on the stock exchange rarely initially come to the Forex or stock market. You need to grow up to work on such sites. Most novice traders start with binary options. Which is not surprising, given the extreme simplicity of this financial instrument. The Third Candle strategy for binary options is the simplest trading system that does not require any special preparation.

The strategy in question is also sometimes called Three Candles. This trading system is based on existing patterns in the movement of stock quotes of any investment asset.

The story about this strategy should begin with the conditions that are necessary for its implementation. It's about about electronic platforms brokers providing clients with binary options trading services. We need to choose one of the brokerage companies that have a quote chart in their tools, which is built on the basis of Japanese candlesticks.

There is nothing difficult about this task. Most brokers on the binary options market have similar candlestick charts in their arsenal. The main idea is to choose a reliable brokerage company, when working with which the trader will not have any technical or financial problems to withdraw earned money from your client account.

How the strategy works

The operating principle of the Third Candle trading system is extremely simple. First of all, take a close look at the quote chart. You will notice that in certain areas of it, Japanese candles replace each other not randomly, but sequentially. When 3–7 candles of the same color are lined up in a row. Such intervals are called uptrends and downtrends, depending on where exactly the price of the investment asset is moving.

A method for timely purchase of a binary option Up or Call.

The trader should wait for two consecutive green candles to appear on the candlestick chart. This figure symbolizes the formation of an upward trend. We should wait for the second green candle to close and exactly at this moment buy a binary option by clicking on the Call button. The third candle will most likely be the same color and we will make a profit.

Method of timely purchase of a binary option Down or Put.

The trader should wait for the formation of two consecutive red candles on the candlestick chart. This figure symbolizes the formation of a downward trend. We should wait until the second red candle closes and exactly at this moment buy a binary option by clicking on the Put button. Third candle with high degree chances are it will be exactly the same color and we will make a profit.

Restriction or when not to trade

In order for the Third Candle strategy to allow a trader to successfully trade binary options, he needs to study the phenomenon of flat or sideways price movement.

As we can see in the chart, during such time intervals there is no pronounced trend on the stock exchange for the asset to become more expensive or cheaper. For us, such periods mean that we cannot accurately predict price movements. Therefore, when the chart is flat, there is no need to open trades.

Expiration date

Novice traders often ask how long they should enter into trades. The Third Candle trading system allows you to successfully trade with any expiration periods. In this case, there are two important aspects, which every trader needs to remember.

First, when setting up a candlestick chart of quotes, you should set a timeframe that will coincide with the expiration time of binary options. In other words, if you make trades for 15 minutes, then each Japanese candlestick on the chart should reflect this time interval.

Secondly, the longer timeframes are used in trading, the higher percentage successful closures according to the strategy under consideration. We do not recommend trading with a 60-second expiration period. Instead, consider longer but reliable trades.

09.25.2017 ·

The three candlestick Forex strategy is quite simple and is suitable for complete beginners. It does not require any deep knowledge; all you need is to look for the required combination of candles.

It cannot be called very profitable, but with experience comes high rates of profitable trades, since in many ways it requires a subjective correct perception of what the chart forms. By analogy with how scalpers begin to see reversals on the minute chart simply because different combinations of candles are stored in memory, here too you can begin to distinguish candles suitable for writing, but not trade them, because such combinations did not work out in the past.

Login methodology

As the name suggests, we need three candles. For example, there was a bullish trend in the market. After a bearish candle appears, we wait for the next one to close. If it also closes downwards, we enter at the opening of the third candle to sell and close the order after this third candle closes. There is also an option to bet in the hope of catching a price value that will ultimately be in the range of its shadow on a closed candle, that is, try to take more than initially assumed by the three-candle strategy. However, if the desired level is not reached, then at the close of the bar profit should be fixed.

Combinations of three candles to enter the next one, suitable for the strategy

Three candle strategy can be considered a reversal. Accordingly, the stop order is placed beyond the local extremum, that is, when trading in a bearish direction, the stop is located behind the maximum, and when trading in a bullish direction, behind the minimum. In this situation, the take is usually smaller than the stop, but the probability of its triggering is not very high, especially if you take into account the factors that will be listed below. Therefore, we can safely remove the loss limit for the level that reversed the price; we shouldn’t expect it to be updated in the near future, and we only need one candle, after that let anything happen. Therefore, you can modify the strategy as you want, but you don’t need to change the location of the stop, because it is justified.

Features of the shape of candles

Should be given Special attention candle shape, since this is what can ultimately greatly increase the number of profitable entries and reduce the number of those that are closed by stop. To do this, look at the following:

1. The first candle in a combination should not be large and full-bodied- that is, it should close so that there is a shadow. Not one or two points for an hourly candle, but at least a third of the entire range, this will indicate that the price has encountered resistance that will hold it for some time. The most ideal option is to form a model from candlestick analysis, but you need to remember that it is still should close according to the trend, and not against, otherwise the condition necessary for the three-candle strategy will not be met. In general, reversal candles usually turn out like this - with a shadow of half the range, or even more.


2. The second candle in the combination should have a relatively large body relative to its entire range. That is, either a long shadow in the direction of the previous trend is not very suitable; such combinations often do not work out as intended in the three-candle strategy. Therefore, it is better to skip the entry if the candle looks uncertain. It should demonstrate the beginning of a rollback, and not at all a tendency towards sideways movement, the likelihood of which will be indicated by a small body and large shadows. Approximately the same can be said about the third candle. But its range should not greatly exceed the range of the second, since in this case there will be a possibility of an already formed rollback, after which there will be either a very short candle or a new reversal altogether.

Despite the fact that the take in the three-candle strategy is meant to be used manually and to take profit when the candle closes, you can leave some part of the order for further movement. That is, for example, fix 2/3 or 3/4, and leave the rest at breakeven and see what happens next. The fact is that three consecutive candles of the same color in candlestick analysis have corresponding trend continuation patterns. This will be three white soldiers for a growing market and three black crows for a falling market. It is assumed that after them the new trend is confirmed and further development is very likely. This does not always happen, but in this case, even just holding a position until a reversal appears on a larger period with a margin will cover several break-evens received, or rather, missed takes. Here everyone decides for himself, if you have patience and a desire to see how it works, you can scroll through and evaluate this method in history. The only thing that may confuse you is the need to use a large period, since candlestick models do not work well for less than four hours.

An example of a long-term trend after a signal has been processed

Automated solutions

The three candlestick Forex strategy is quite simple and suitable for complete beginners. It does not require any deep knowledge; all you need is to look for the required combination of candles. It cannot be called very profitable, but with experience will come high rates of profitable trades, since in many ways it requires a subjective correct perception of what the chart forms. By analogy with how scalpers begin to see reversals on the minute chart simply because different combinations of candles are stored in memory, here too you can begin to distinguish candles suitable for writing, but not trade them, because such combinations did not work out in the past.

Login methodology

As the name suggests, we need three candles. For example, there was a bullish trend in the market. After a bearish candle appears, we wait for the next one to close. If it also closes downwards, we enter at the opening of the third candle to sell and close the order after this third candle closes. There is also an option to set a take profit in the hope of catching a price value that will ultimately be in the range of its shadow on a closed candle, that is, try to take more than initially assumed by the three-candle strategy. However, if the desired level is not reached, then the profit should be fixed at the closing of the bar.

Screenshot: Combinations of three candles to enter the next one, suitable for the strategy

The three candlestick strategy can be classified as a reversal strategy. Accordingly, the stop order is placed beyond the local extremum, that is, when trading in a bearish direction, the stop is located behind the maximum, and when trading in a bullish direction, behind the minimum. In this situation, the take is usually smaller than the stop, but the probability of its triggering is not very high, especially if you take into account the factors that will be listed below. Therefore, we can safely remove the loss limit for the level that reversed the price; we shouldn’t expect it to be updated in the near future, and we only need one candle, after that let anything happen. Therefore, you can modify the strategy as you wish, but there is no need to change the location of the stop, since it is justified.

Features of the shape of candles

You should pay special attention to the shape of the candles, since this is what can ultimately greatly increase the number of profitable entries and reduce the number of those that are closed by the stop. To do this, look at the following:

1. The first candle in the combination should not be large and full-bodied - that is, it should close so that there is a shadow. Not one or two points for an hourly candle, but at least a third of the entire range, this will indicate that the price has encountered resistance that will hold it for some time. The most ideal option is to form a model from candlestick analysis - a shooting star or a hammer, but you need to remember that it must still close with the trend, and not against it, otherwise the condition necessary for the three-candlestick strategy will not be met. In general, reversal candles usually turn out like this - with a shadow of half the range, or even more.


2. The second candle in the combination should have a relatively large body relative to its entire range. That is, a dozhik or a long shadow in the direction of the previous trend is not very suitable; such combinations often do not work out as intended in the three-candle strategy. Therefore, it is better to skip the entry if the candle looks uncertain. It should demonstrate the beginning of a rollback, and not at all a tendency towards sideways movement, the likelihood of which will be indicated by a small body and large shadows. About the same can be said about the third candle. But its range should not greatly exceed the range of the second, since in this case there will be a possibility of an already formed rollback, after which there will be either a very short candle or a new reversal altogether.

Despite the fact that the take in the three-candle strategy is meant to be used manually and to take profit when the candle closes, you can leave some part of the order for further movement. That is, for example, fix 2/3 or ¾, and leave the rest at breakeven and see what happens next. The fact is that three consecutive candles of the same color in candlestick analysis have corresponding trend continuation patterns. This will be three white soldiers for a growing market and three black crows for a falling market. It is assumed that after them the new trend is confirmed and further development is very likely. This does not always happen, but in this case, even just holding a position until a reversal appears on a larger period with a margin will cover several break-evens received, or rather, missed takes. Here everyone decides for himself, if you have patience and a desire to see how it works, you can scroll through the chart and evaluate this method on history. The only thing that may confuse you is the need to use a large period, since candlestick models do not work well on frames less than four hours.

Screenshot: Example of a long-term trend after a signal has been processed

Another very important point- you should not consider such signals as 100% reversal. As you know, a trend is much more likely to continue than to reverse, so the most the best method Working with a three-candle strategy will look for the end of corrections in the medium-term trend. That is, if we have a bullish trend on a four-hour chart, then we look at the correction on the hourly chart and, based on the signal from it, enter in the direction of the main movement. Trading against the trend is possible and often brings a large one-time profit, but much more often stops are obtained, and, given the ratio that is used in the three-candlestick strategy, this will greatly affect the overall performance of this trading technique.

Automated solutions

There are ready-made indicators that can signal that the pattern we need is being formed. However, as practice shows, independent assessment of a combination of candles for compliance with the criteria described above is much more effective, since the indicator looks for strict compliance with parameters and numbers, and in our case it pays great importance exactly appearance, to how truly reversal such a formation looks. If all these parameters are transferred into code, you will get a huge number of final values ​​that need to be entered so that only those candles are selected that correspond to their vision of this model. However, you can try different indicators (there are many of them on the Internet due to the popularity of the three-candle strategy).

In this article we will look at what kind of trading strategy Three candles are for binary options and Forex. Also here you will find tips on its use and settings.

The strategy for binary options Three candles is quite popular among traders. It has several advantages over others. It works great with short-term trading (for example,).

The system is one of the indicator-free strategies, so it can be used by professionals and beginners who have not yet fully mastered the use of technical indicators. The percentage of profitable contracts when trading using this strategy often exceeds 80%.

Three candles is great for almost all currency pairs. Let's look at what its essence is and what rules must be followed when working with this system.

The essence of the strategy

The Three Candles system in binary options for 60 seconds is based on the use of 2 patterns of candlestick analysis - “3 white soldiers” and “3 black crows”. These continuation patterns are often formed during strong trend movements.

"Three Black Crows" means a series of 3 bearish bars that have small shadows and long bodies, and there are no price gaps between them. After this pattern appears in a bear market, most often quotes continue to move in a downward direction.

A similar pattern is “three white soldiers.” It is visible in a bull market and becomes a precursor to subsequent price growth. The model consists of 3 ascending bars.

Increase

You can use the Three Candles strategy with a time frame of 15 seconds or 1 minute. In both cases, you should set the binary options expiration time to 60 seconds.

Trading Rules

For efficient trading in the BO market under this system it is necessary to comply certain rules. CALL trades should only be opened during an uptrend. It is advisable to enter short PUT positions during a downward trend. Trading against the trend using these patterns is associated with high risk indicators.

Increase

When the following candlestick patterns appear - “3 white soldiers” or “3 black crows”, you need to carefully study the price bars that form the patterns. It is worth paying attention to the closing and opening costs. If all bearish bars open with a downward gap in relation to the previous one, then this signal can be used to acquire a BO for 60 seconds (in the screenshot there are signals 1, 3 and 4, there are gaps between the candles).

If there are upward gaps between bearish bars (the signal is red in the screenshot), then this signal should be skipped. The same should be done with bullish candles. The most optimal entry points are formed when patterns are formed that have no gaps between the candles at all.

Filtering out false signals

When viewing the history of quotes in any currency pair, you will notice that this system For binary options with a time frame of 60 seconds, positive results are not always obtained. There are cases when, after the formation of the “3 white soldiers” or “3 black crows” patterns, the trend begins not to continue, but to end. Accordingly, those trades that are opened according to these signals will bring losses.

Increase

To prevent such situations and filter false signals, it is necessary to use several indicators, for example,. It is enough to plot the Stochastic Oscillator on the chart, and when a pattern of three bearish or bullish candles is formed, you need to look at exactly where the signal line is directed in the oscillator.

If “three black crows” appear, and the lines are directed downward, then you can purchase a PUT option. If the indicator line has not yet made a downward reversal, then it is better to ignore the signal, since most likely it will be false. Likewise, if “three white soldiers” is demonstrated, its growth in the Stochastic Oscillator signal line indicator will be confirmed.

Before you start trading using the Three Candles system, it is advisable to test it in demo versions on different currency pairs. If on some financial markets it can demonstrate high profitability values, while on others the system will give less accurate signals.

You can also test the system using the MetaTrader 4 terminal, by scrolling through the chart of the selected pair and carefully analyzing the history of quotes. It is enough to find at least a hundred “3 white soldiers” or “3 black candles” patterns and calculate how many of them gave false signals and how many were correct.

If the ratio of profitable to unprofitable signals is less than 60%, then you need to select a different currency pair and carry out similar calculations. Conduct an analysis of several financial assets to select the one according to which the Three Candles system will provide at least 70 - 80% profitability.

Graphical parameters and indicator functions

In this strategy, the Japanese candlestick chart has become a kind of indicator. The location and shape of the three candles have an indispensable influence on trading system. Therefore, it is necessary to understand the principles by which Japanese candlesticks are built.

You can use the strategy without indicators. But it's better to use some tools to technical analysis to filter false signals from 3 candles.

We need an indicator that can determine the current trend on the price chart. To do this, you can use a simple one having a period of 50 or 100.

If the value of an asset is located at the moving average, then this is a signal about a downward trend. When the value of an asset is above the moving average, an upward trend is demonstrated.

If the price is constantly intertwined with the moving average, then most likely a sideways trend prevails on the chart. For additional filtering, you can use Stochastic with the settings 5,3,3.

IN in this case the direction of the slow moving average will be priority. The direction must coincide with the direction of movement of the 3rd candle. But it will be even better if Stochastic is located in the oversold or overbought zone, which will be an additional signal.

Trading signals

The best solution would be to trade during the day, when the largest American and European exchanges are open. It is better to choose an underlying asset where there is a pronounced trend during the trader’s work, and moderate volatility is also noted. In fact, this trading system can work successfully on any time frame except the second one.

Professional traders recommend choosing the most suitable timeframe in the “trading risks/dynamics” ratio, namely the M1 interval. First, you need to determine the trend in the current market, for which you can use the chart scaling capabilities.

Signal to increase

• In a downtrend, the asset quote moves.
• 2 growing green candles are formed.
• When the 3rd green candle opens, you should immediately buy a contract to increase quotes.

Increase

Down signal

• In an uptrend, the asset price moves.
• 2 falling red candles are formed.
• When the 3rd red candle opens, you should immediately buy a contract to reduce prices.

Increase

By drawing up binary contracts every time, working on correction ones, the trader has the opportunity to complete 87% of open positions successfully. Quotes naturally begin to adjust when a one-sided trend is built. It follows that by concluding a binary transaction on a corrective movement, a trader is almost guaranteed to be able to close the contract with a profit.

In this trading mode, it is recommended to strictly adhere to the principles of risk management, which involve opening transactions for an amount that does not exceed 3% of the total available deposit. If a trader has a small amount of funds in his account, then it is necessary to reduce risks and trade in minimum lots.

How to use the Three Candles strategy on binary options. Instructions for beginners

To better understand the principle of operation, consider an example of a trade on a 5-minute timeframe. First you need to go to the web terminal brokerage company 24option https://www.24option.com/international/ru/ , where we select the most liquid EUR/USD pair from the list of assets and expand a candlestick chart with an added stochastic oscillator.

Increase

To trade BO in accordance with the Three Candles system, it is convenient to use the 24option broker. The company offers traders a terminal with the ability to customize a variety of charts and use any tools for technical analysis.

Almost immediately after the start of active trading in Europe, a signal was formed for the euro to depreciate against the US dollar.

The Three Candles strategy for binary options is popular among many traders. It has several advantages over other trading systems. Firstly, this strategy is great for short-term trading (buying binary options with expiration date). Secondly, it belongs to the category of indicator-free strategies, so both professionals and beginners who have not yet become familiar with it can work with it. technical indicators and have not yet learned how to use them correctly. Thirdly, the percentage of profitable transactions when trading using this trading system often exceeds 80%. Fourthly, the Three Candlesticks strategy works effectively on almost all currency pairs. So, what is its essence? And what rules must be followed when working with this strategy?

The essence of the Three Candles strategy

The Three Candles strategy for binary options 60 seconds is based on the use of two candlestick analysis patterns - three black crows and three white soldiers. They are continuation patterns and often form during strong trend movements. The three black crows pattern is a series of three bearish bars that have long bodies, small shadows, and no gaps between them. After this pattern appears in a bear market, quotes most often continue to move in a downward direction.

“Three White Soldiers” is a similar pattern that is observed in a bull market and is a harbinger of further growth in quotes. The pattern consists of three ascending bars.

You can use the Three Candles strategy on both a 15-second and a 1-minute timeframe. But in both cases, it is necessary to set the expiration period of binary options to 60 seconds.

Trading Rules

To effectively trade on the binary options market using this strategy, you must follow following rules. First, the deals CALL should be opened exclusively during an uptrend. It is advisable to enter short positions (PUT) only during a downward trend. Countertrend trading using the patterns described above is associated with high risks.

Secondly, when three black crows or three white soldiers candlestick patterns appear, carefully study all the price bars from which the patterns are formed. In particular, pay attention to their closing and opening prices. If each bearish bar opens with a downward gap (gap) in relation to the previous one, the signal can be used to buy binary options with an expiration period of 60 seconds (see the first, third and fourth signal in the figure - there are gaps between the candles). If there are upward gaps between bearish bars (see figure, the signal is highlighted in red), it is better to skip such a signal. The same is true for bullish candles. But the most optimal entry points appear when patterns are formed, between the candles of which there are no gaps at all.

How to filter out false signals?

Having looked at the history of quotes for any currency pair, you may notice that this strategy for binary options for 60 seconds does not always give positive results. There are often cases when, after the formation of three black crows or three white soldiers patterns, the trend does not continue, but ends. Accordingly, trades opened based on these signals bring losses.

To prevent such situations and filter out false signals, you can use some indicators - for example, . Place the Stochastic Oscillator on the chart and when a pattern of three bullish or bearish candles appears, look at where the oscillator signal line is directed. If the three black crows pattern appears, and the Stochastic lines are directed downward, you can buy PUT options. If the indicator line has not yet turned down, it is better to ignore the signal, because most likely it will turn out to be false. Similarly, if you see the three white soldiers pattern, then its confirmation will be the growth of the signal line of the Stochastic Oscillator indicator.

Before you start trading on the binary options market with an expiration period of 60 seconds, it is advisable to test the Three Candles strategy on different currency pairs. It can show high profitability indicators on some financial assets, while on others the strategy will give fewer correct signals. You can test the trading system either on