Three Candles: one of the best binary options strategies! 3 Candles Strategy for Forex and Binary Options 3 Candles Strategy

The strategy discussed here will appeal to all beginners for its simplicity, and, in addition, it is very effective due to its search logic. trading signals, which is based on the price behavior as a primary factor. This simple profitable Forex strategy is based on a candlestick pattern called "3 Candles" - in English 3 Candle.

Trading conditions

In addition to the fact that this strategy is extremely simple and quite profitable when applied to Forex, it is also very versatile. It can be used on any currency pairs, but it is still advisable to choose more volatile instruments for this purpose, rather than calm flat pairs, such as EUR/GBP or USD/CAD. It is optimal to trade EUR/USD, AUD/USD, USD/JPY NZD/USD and so on.

The timeframe can also be any, however, in order to protect yourself from unnecessary worries, it is still better not to touch the minute charts, but starting from M5, you can already confidently trade up to D1.

Trading time at intraday trading, if a trader prefers small timeframes, this is, of course, the London and New York sessions.

At the heart of this simple and profitable Forex The strategy contains the candlestick pattern “Three Candles” (3 Candle), which is shown in the screenshot below. This is not the only model name, it is sometimes called the "reversal bar", but there are other poetic names as well.

The essence of this candle formation is that the first candle is located between two other candles and is the highest among them in an uptrend or the lowest in a downtrend.

The second candlestick is a confirming one, showing the potential of this model. In addition, at the closing point of the second candle, the trader will enter the market using this simple strategy.

The third candle will already play the role of a take profit, since in the process of its formation, the trader will already be watching the development of events in Forex in an active trading process.

The formation of the “Three Candles” formation 3 Candle means a short-term change in Forex strength. That is, in the above screenshot, there was a bullish movement and the formation of the candlestick pattern in question indicated a change in the trend to a bearish one. This is not necessarily a trend change, it could very well be a simple correction, but this short-term momentum is enough for the trader to take some profit.

Market Entry Signals

How does a simple profitable Forex 3 candles strategy work. As already mentioned, the trader enters the trade immediately after the second candle closes, which should confirm the formation of the desired candle formation.

However, in order to receive more accurate signals, each trade will be additionally filtered by stochastics with standard settings (5:3:3). Nothing complicated is to be expected here. You just need to look at the indicator, and if the direction of the signal lines of the stochastic oscillator contradicts the signal, then you need to skip it. That is, if a buy signal has formed on the price chart, but the stochastic lines are directed downwards, then you should refrain from entering a trade.

Another way to avoid inaccurate signals is not to use the pattern if its constituent candles have a small vertical size. This is because the use of short candles violates the very logic of the formation of the model.

Stop loss and take profit levels

Stop loss is placed at a distance of a small indent from the High / Low points from the first candle, as it acts as a short-term minimum or maximum, depending on the direction of the trend. That is, in the case of a sell signal, the stop loss is placed at a distance of 3-5 points from the High point, and if the trader is dealing with a buy signal, then a protective order is placed just below the Low point.

You can use a fixed take profit, but then its size will depend on the time frame and the selected Forex currency pair. For example, on M5-M15 you can set a take profit of 10 points, and on H4 it is already much more, about 30 points.

It seems safer to exit after the first profitable candle. For example, a trader entered the market after the second candle in the “3 candles” (3 Candle) model under consideration, then a weak neutral candle formed, maybe it will even lead to a small loss, but if the stop loss did not work, then the trader waits until it appears a candle that will bring the position into profit. As soon as such a candle has appeared and completed its formation, the trader closes the position, regardless of how big or small profit came out of this trading operation. This approach is justified by the fact that this candle formation indicates the development of a short-term impulse, so it’s not worth sitting in the market for a long time, the profit turned out and it’s good, it needs to be fixed and the deal closed as soon as possible.

Important secondary points

The first point concerns the uncertainty in the market, when the price does not move much during the next 5 candles after the signal. In this case, it is recommended to exit the trade. That is, you need to understand that a simple and profitable Forex strategy "Three Candles" is designed to work out a short-term impulse. If it is not confirmed, and 5 candles are more than enough for this, then something incomprehensible is happening on the market and it is better to refrain from trading using this system until the situation clears up.

Well, the second point is traditional for intraday trading - do not trade on currency pairs for half an hour and half an hour after the release of important news for them, since the market at this moment is extremely unstable and can bring a lot of unpleasant surprises.

Risk management

As for risk management, classic money management recommendations will also be useful here, which allow you to confidently operate in Forex and gradually turn from a beginner into a professional. If we turn to the specifics, then this simple and profitable Forex strategy requires that in one transaction the risk level does not exceed 3% of the entire deposit amount.

Adding a strategy to a price chart

In order not to search for the necessary candle formations on your own, you can simply download the ready-made 3 candles strategy template. After that, the trading chart of the currency pair that will be used for trading is opened and right-clicked on it, selecting the 3 Candles template.

For those who don't know how to add a template. The downloaded archive will contain 2 folders, their contents should be copied and placed in folders with the same name, which are located in the directory of the installed trading terminal. To find them, you can right in the terminal window, click "File" - "Open data directory".

After everything is done correctly, the price chart window will look like this.

As you can see, the stochastic has already been plotted on the chart and there are arrows of two colors - red and blue. They are drawn by a special 3 Candles indicator after the second one has formed - the signal candle of the Forex strategy considered.

Of course, the trader will not take all these arrows, since the signals are filtered by stochastics, and trading during the news period is excluded, and since the EUR/USD pair is on the screenshot, it is influenced by many fundamental factors of the USA and the Eurozone, the list of which can be found, looking into the Forex trader's economic calendar.

Good afternoon fellow traders binary options!

The entire market is a series of repetitive behavioral patterns, that is, crowd reactions to both external and internal factors. Analyzing price patterns, we find certain patterns that help us predict the future direction of the price. The problem is that there are a great many different patterns, and not all of them are easy to interpret.

Today we will analyze how to find and use the figure "Three candles is a simple and easily defined pattern that can be used as an independent trading system.

Characteristics of the strategy

Reference section

Strategy idea

The Three Candles pattern is located just at the junction of two trends and resembles a fractal in shape. If we are talking about buying, then this is a sequence of three candles, where the high and low of the middle candle are lower than the high and low of the two standing next to each other. At the same time, the last two candles should close in the direction of the transaction. That is, for purchases, the last two candles must be white.

If the pattern for buying resembles a hollow, then the pattern for selling is a cap. High and low candles in the middle should be higher than the high and low of the two adjacent ones. Also, in the case of sales, the last two candles should be black, which tells us that the trend has changed to a downtrend.

You don't have to manually determine the pattern on the chart - this task falls on the auxiliary 3rd Candle. The indicator signals the appearance of a new pattern with an arrow on a blue or red chart. An up arrow means a signal to buy a Call option, a down arrow means to buy a Put option.

The strategy allows you to trade on any symbol and timeframe. The pattern shows itself best on high timeframes, from 1 hour and above. But you can also trade on the minute chart, just a fraction false signals will be higher. The main thing is to filter all signals using an oscillator - it cuts off most of the entries against the trend.

The CCI oscillator used in the strategy is displayed on the chart as a line and has overbought/oversold zones — above 100 and below -100, respectively. That is, if the value rises above 100, we do not consider buy signals, if it is below -100, we do not consider sales.

We will trade on corrections and reversals, so these are not the safest trades for. However, if everything is done correctly - that is, wait for confirmation and only after that enter the transaction - the system will work as expected.

Trading Rules

Call option:

• We wait until a blue up arrow appears on the chart;
• The CCI on the previous bar must be below 100.

Put option:

• We wait until a red down arrow appears on the chart;
• The CCI on the previous bar should be above the -100 level.

The expiration time is always 1 candle of the current TF. per transaction - no more than 3% of the deposit.

Trade examples

currency pair GBPUSD, timeframe 15 minutes. Despite the fact that there is a clear upward trend on the chart, only two out of four trades were closed in ITM for sale (Put option). We received buy signals (Call option) too late, but here the filter saves, which in both cases was in the overbought zone. That is, we did not open a single buy deal in this case.

Volatile pairs are best suited for trading, for example, these include crosses with the yen: GBPJPY,

A profitable trading technique does not have to be complicated. On the contrary, the simpler the rules for entering the market, the better. A vivid example of this is the “3 candles” strategy, which is suitable for trading both in Forex and binary options. This technique is based on the rules of Price Action and is considered one of the simplest and at the same time effective. Let us consider in more detail its features and rules for concluding transactions.

Strategy "3 candles": a description of the technique

The "3 candles" technique is based on classical rules price action systems. This means that in order to find entry points to the market, it will be necessary to look for certain combinations of candles on the chart.

The strategy is suitable not only for Forex, but also for binary options. This is a universal technique that can be used when working with any candlestick charts. The trading technique is very simple, so the strategy is suitable even for beginners.

Features of the Three Candles technique:

• simple conditions trade.
• the ability to trade on any timeframe.
• trading using this technique, the trader will learn to understand the market and see the balance between supply and demand.
• the technique is combined with any indicators and other tools that can be used for additional filtering of signals.

The technique has only one drawback - when trading on a minute and five-minute timeframe, the strategy can give more false signals due to market noise. However, this can be easily compensated for by applying additional filters.

Three Candles Strategy: Trading Principles

Trading according to the strategy is based on the Three Candles pattern, which is one of the main reversal formations of the Price Action methodology. This combination of candles is usually a sign of a change in the market trend, or the beginning of a corrective price movement. It signals a change in the balance of power between sellers and buyers.

Features of the figure "Three candles"

The “3 candles” pattern provides an opportunity to profit from a short-term change in trend, when the price makes a small rollback from the main trend, and then returns to its previous course. It can also be used to find a profitable entry point into the market at the beginning of a new powerful trend. In the latter case, the profit will be much higher, but such signals do not appear as often as corrective ones.

Search for a pattern on the forex strategy "Three candles"

The type of formation will depend on the current trend. The extremes of the first candle of the pattern should always be higher or lower than the extremes of the previous candle. For example:

• If there was an uptrend on the chart, then the High and Low prices of the first candle of the pattern should be lower than the High and Low prices of the previous candle.
• If there is a downtrend on the chart, then it is necessary to wait for the appearance of a candle, the extremes of which will be higher than the extremes of the previous candle.

The second candle of the pattern should confirm the development of a correction, rollback or trend change. Its extrema should form below (when the price rolls back down on an uptrend) or above (when the chart rolls back up on a downtrend) the extrema of the first candle of the pattern. An example of the pattern is shown in the figure below.

The unspoken rule of Price Action says that if the extremums of two candlesticks in the chart consistently rise or fall, then the third candlestick should form according to the same scenario. An order should be placed at the opening of the third candle. The direction of the trade must match the direction of the pattern:

• With a consistent price decrease, a sell trade should be opened.
• With a consistent increase in price, it is necessary to open a buy position.

Let's take a closer look at the trading rules.

Conclusion of transactions according to the strategy of three candles

Trading using this strategy can be carried out around the clock, regardless of the time of day. The currency pair can also be any. It is better for beginners to use pairs where one of the assets is Japanese yen.

Rules for opening buy trades

Pattern search and trade execution:

• Wait for the moment when, after a downtrend, an up candle appears, in which the High and Low prices are higher than the similar extremes of the previous candle.
• The second candle of the formation should confirm the signal - its extremes should be higher than the extremes of the first candle of the formation. The candle itself should be bullish.
• If the previous two conditions matched, then at the opening of the third candle, you can make a deal to buy.

As a guideline for setting a take profit on a trade, you can use:

• Strong resistance or support level.
• The nearest round level ending in 00 or 50.

Important condition: minimum size take profit should be 35 pips. If the distance from the entry point to the level is less than 35 points, then it is better to skip the entry into the trade, or set the target at the next nearest strong level. In this case, do not forget to move the trade to breakeven immediately after the price reaches the first round level on the way to the target.

A protective stop loss is set according to the classical scheme - next to the nearest support level.

Sell ​​order rules

Signals for opening a sell trade:

• Wait for a bearish candle to appear on the chart after an uptrend, the extremes of which will be below the extremes of the previous candle.
• The next candle should also be bearish - its High and Low prices should be below the extremes of the first candle of the pattern.
• If both conditions match, you can open a sell position immediately at the moment when the third candle of the pattern appears on the chart.

Take profit and stop loss for the transaction are set according to the same rules as when concluding a buy order. At the same time, the take profit size should be at least 35 points, and the stop loss size should be 1.5-2 times less than the take profit.

Additional terms

The strategy is quite simple, but sometimes non-standard formations appear on the chart, which are better to skip. For example:

• If the first two candles of the pattern have a too small body or are doji, then it is better to skip the trade. This is a sign of market instability.
• Often a pattern appears on the chart, in which the second candle has a too long body (2-3 times the size of the extreme candles). It is also better to miss such a signal, since there is a high risk that the corrective impulse of the price has already worked out and the market will continue to move in the same direction. But the long third candle, on the contrary, is a big plus and allows you to take a good profit from the market.
• In intraday trading, transactions should be opened taking into account the release of important macroeconomic news that may affect the price movement. It is not recommended to enter positions 30 minutes before and 30 minutes after the publication of the news. A schedule of such news can be found in economic calendar almost every forex or binary options broker.
• If you opened a deal, but during the next 5-6 candles there is no significant price change and the chart moves in a flat, then it is recommended to close the current order.

For additional filtering of transactions according to the "3 candles" strategy, you can use the stochastic oscillator. Its settings must correspond to the timeframe (we recommend that you familiarize yourself with the rules), or in extreme cases, be standard - 5.3.3. In this case, the market should be entered only in the direction of the stochastic moving, for example:

• The moving average is located above the central level and moves upwards. You can open a buy position.
• The moving average moves down and is under the central level. You can make a deal to sell.

Another confirming signal is when the stochastic enters the overbought or oversold zone.

Three candlestick strategy in binary options

This technique also works well when trading binary options. In this case, the working timeframe should start from m30. Of course, you can also trade on the 15-minute timeframe, but in this case, the risks increase significantly.

When trading on binary options, the role of take profit will be played by expiration, the time of which should be within 3-5 candles. It is not recommended to use a longer expiration, as the corrective movement may turn out to be short-term.

The principle of concluding transactions is exactly the same as in Forex trading:

• A pattern of two bearish candlesticks has appeared on the chart, the extremes of which are consistently decreasing. You can buy a Put option (for a fall) at the opening of the third candle of the pattern. Set the expiration time to 3-5 candles, depending on the strength of the movement.
• A pattern has formed on the chart of a pair of bullish candles, the lows and highs of which are gradually rising. You can buy a Call option (for an increase) at the moment when the last third candle of the pattern opens. Also set the expiration date to 3-5 candles.

Trading on binary options is more risky, so it is recommended to supplement the strategy with a filter - support and resistance levels, stochastic, parabolic or any other indicator showing the market reversal.

The trading technique "Three Candles" is good for its versatility. You can use it as is or add other tools. With the correct interpretation of the signals, the number of profitable trades reaches 75-85%, depending on the timeframe. The higher the timeframe, the more quality signals the strategy gives.

See also the video - Strategy "3 candles" for 60 seconds for binary options

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Love in trading simplicity, reliability and lack of complex constructions? Then you can get comfortable - today we will begin to study the most accessible strategy "3 candles". Let's reassure right away - simplicity has nothing to do with profitability, because “more difficult” does not mean “more profitable”. Cherished points will be regularly converted into the growth of your deposit.

So let's start studying this really interesting, and at the same time really profitable strategy.

Just click "explore" - and earn on the "3 candles" strategy in real conditions!

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Advisor Turbo Profit 3.1 latest version robot, in which the developers have added an improved logic for working with virtual levels, and also introduced the best optimized settings. For example, it became possible to set the size of a basic Forex order. After disconnection from the server, new lots are not formed, but open positions are closed. Also added a function exit_mode.

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Default N_enable_Sloy is 7, an increase to 14 will not change the profit received, since it does not matter how many trades the Turbo Profit EA will hedge when creating a new layer. The number of layers can also be doubled, this will not affect the result in the medium term. We recommend increasing the value RiskPercent at least up to 10%. This value is responsible for the amount of the deposit that you risk, and the factory 2% seems like too little risk.

Turbo Profit 3.0 starts trading with a volume of 0.02 when the RiskPercent at 2%, and a lot of 0.30 at RiskPercent 30%. In a later version, it became possible to set the order volume manually. This criterion directly affects the amount of income received, it does not lead to a complete drain of the balance, and the maximum drawdown does not exceed 10% in the worst case.

The key point in the Turbo Profit settings is LotMultiplicator. He is responsible for the step of increasing the volume of the transaction. The default value is 1.2, it is allowed to increase to 1.3. It is interesting that with a step that increases the lot by 2 times, instead of 1.3, the potential profit will also increase by 2 times and reach 60% per month. These are aggressive installations, which, in addition to RiskPercent and LotMultiplicator include additional options.

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The distance to the order is regulated hSETKY. We used 35. Having opened 2 multidirectional positions in the GBR/USD pair at a price of 1.30000 with aggressive settings, we get the following picture: thanks to N_enable_Sloy The Turbo Profit Expert Advisor makes 7 losing entries every 35 pips with an initial lot of 0.30 at a RiskPercent of 30% before it opens the Forex lock and forms the next layer. Each new position will be doubled due to LotMultiplicator equal to two. Thus, after 250 points, we will trade with an order equal to 20.

The Forex strategy tester showed the maximum value of the transaction equal to three, and the profit on it reached 1000 points. But for such trading, you need to have a deposit with a high margin of safety.. In writing the review, we used a demo account and a strategy tester. Turbo Profit has shown itself to be a high-quality and profitable robot that can generate income with appropriate modification.

Binary options - strategy " 3 candles"- is very popular today. All because it is simple, effective, with a good percentage profitable deals.

Every novice in binary options can use it, since special knowledge technical analysis graphics are not required.

You just need to know how the graph is built " Japanese candles". It is he who is fundamental in the considered trading strategy.

Binary Options « 3 candles» are well traded on the timeframe of 15 or 30 minutes. You can also consider a larger timeframe.

If the timeframe of the asset price chart is less than 15 minutes, then it is better not to apply the trading strategy, since there are many market noise, and from this there is a high probability that the trading strategy " three candles' won't work.

It is necessary to work according to this strategy according to the trend. When the price corrects, it is necessary to seize the moment for a successful entry into the transaction.

This is where three candles help us. The first candle is the highest or lowest of the three. In addition, it must be higher or lower (depending on the trend) of the previous candle.

The second candle should close with the trend and, very importantly, it should not be in the body of the first candle.

The third candle is a signal one – it is necessary to enter a trade on it in the direction of the second candle.

Applied indicators

The Japanese candlestick chart is a kind of indicator in this strategy. The shape and location of the three candles will certainly affect the trading strategy.

Therefore, it is necessary to understand the principles of building Japanese candlesticks.

The strategy can be applied without indicators. But, of course, it is better to use some technical analysis tools to filter out false signals from three candles.

You need an indicator that will determine the current trend on the price chart. A simple moving average with a period of 50 or 100 is best suited for this.

So, if the price of an asset is below the moving average, then the trend is down. If the price of an asset is above the moving average, then the trend is up.

If the price is constantly intertwined with the moving average, then, most likely, a side trend prevails on the chart.

Additionally, for filtering, you can use the well-known oscillator - stochastic. Its settings should be 5, 3, 3.

The direction of the slow moving average, in this case, is a priority. It should coincide with the direction of movement of the third candle.

But it will be even better if the stochastic is in the overbought or oversold zone. This will be an additional signal.

Conditions for entering a trade according to the strategy

Binary option CALL

– we buy a CALL binary option on the third candle, when the first candle is below the previous candles and the second candle, while the second candle did not close in “ body» of the first candle. Stochastic should be in the oversold zone.

Binary option PUT

– we buy a PUT binary option on the third candle, when the first candle is higher than the previous candles and the second candle, while the second candle did not close in “ body» of the first candle. Stochastic should be in the overbought zone.

binary option expiration date

The term of a binary option must be equal to the timeframe - the period of time for which the chart is built.

Or you can set the appropriate expiration time, which should coincide with the close of the third candle.

When not to trade

• you cannot trade one hour before and after the release of important economic news;
• you cannot enter a trade if the second candle closes in " body» of the first candle.

Here are the simple rules for this trading strategy. By correctly analyzing the chart and following the rules of the strategy " 3 candles”, you can consistently make a profit from binary options trading.