3 Candles atrategy is a price action trading system
Time Frame: 5, 15 Minutes or higher
Currency Pairs: AUD/USD, GBP/USD, EUR/USD and other majprs.
Trading setup
Candle Identification:
Locate the first candle, which stands out as the highest among three adjacent candles.
The subsequent candle to the right is the second candle, followed by the significant 3rd candle (3°Candle), on which we base our strategy.
Entry Points:
Enter a trade at the commencement of the 3rd candle.
Stochastic Filter:
Employ stochastic (9,3,3) as a filter.
Buy when stochastic crosses above 20 and sell when it crosses below 80.
A 3rd candle often coincides with stochastic crossing either 80 or 20, indicating an optimal trading opportunity.
Take Profit and Stop Loss Management:Take Profit:
Option 1: Exit the trade after gaining 10 pips.
Option 2: Adjust stop loss to breakeven after gaining 10 pips.
Option 3: Trail the trade with a stop loss set at 10 pips or higher.
Stop Loss
For Long Entry: Set stop loss below the 1st candle.
For Short Entry: Set stop loss above the 1st candle.
Trade Execution:
Identify the 3rd candle using the criteria mentioned.
Place trades according to the direction indicated by the 3rd candle.
Utilize stochastic to confirm trade signals.
Manage trades efficiently by employing the specified take profit and stop loss strategies.
By adhering to these rules, traders can capitalize on favorable market conditions and enhance their trading outcomes.
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