when trading forex You should pay attention to candlestick patterns that appear on your laptop screen. The reason is that candlestick patterns can help you predict the next price trend.

The two candlestick patterns that you should keep an eye out for are the three white soldiers and three white crows. Understand the full meaning of these two formats by reading the following articles:

three white soldiers

The Three White Soldiers is a candlestick pattern used as a symbol of existence. bullish reversalThis pattern consists of 3 candlesticks: green or white candlesticks A, B and C, which form respectively and normally. no long tail.

In this pattern, the size of candle A is smaller than B and B is smaller than C because candle B opens at a price level that remains within the A price range and closes above the closing price of candle A. Similarly, candle C opens at . The middle price of candle B and closes above the closing price.

The existence of this pattern implies that there is bullish pressure very strong in the market This is evidenced by the buyer’s ability to keep asset prices high. The absence of a tail in this candlestick pattern also indicates that buyers can keep the price of the asset high.

Three white stripes appear when the asset price trend is down. It is not often that this pattern is preceded by a doji candlestick, indicating that the decline in the market price is experiencing saturation. There are also times when there is a consolidation area between 3 candlesticks that make up this pattern momentarily. It is remembered that bullish pressure Too strong can provoke existence. buy too much.

three black crows pattern

The Three White Soldiers is a candlestick pattern used as a symbol of existence. downward reversalThis pattern consists of 3 candlesticks: black or red candlesticks A, B and C, which form respectively and normally. no long tail.

In contrast to the 3 white soldiers, candle A is the largest candle compared to B and C is the smallest candle. This means that candle B opens at the price level within the price range of candle A and closes at the lower price level A, just like candle C.

The existence of this pattern implies that there is force Very strong in the market. Initially, buyers may push the price higher than the closing price of the previous session. but due to strong seller pressure The session’s market price continues to close at a lower price level than the previous close. The absence of a tail in this candlestick pattern also shows that sellers are able to keep the price of the asset low.

This pattern appears when the previous asset price trend is rising. as well as three white soldiers It is possible that this format will also be preceded. doji candle This shows instability in the market and alternates with consolidation due to overbought.

The difference between 3 white soldiers and 3 black crows

Figure 1: Three Black Crows and Three White Soldiers Source: ThinkMarkets

Although both are candlestick patterns indicating a possible reversal, the 3 White Soldiers and 3 Black Crows have some quite striking differences, namely:

  1. different colors. The first pattern is green or white. while the second style is black or red.
  2. indications. The first form indicates strength. buying power and a possible reversal, while the second pattern indicates strength. sales force and possible reversals
  3. trend forward. The first form is preceded by bear trendwhile the second form is preceded by bull trend.
  4. candle pattern. The first pattern consists of three candles moving upwards. while the second pattern consists of three candles moving down. However, neither of them have a tail or very short tail.

How to trade using three white soldiers and three black crows.

Although it is a strong reversal indicator. But that doesn’t mean that three white soldiers and three black crows can’t show false signals. This false signal occurs when the closing price of the candlestick that appears after candlestick C is not lower than (three black crows) or higher (three white soldiers) relative to candlestick C

To overcome this, first you will see the price trend that lasted for the previous 3 days. Make sure that the trend during that time shows a steady increase (three black crows) or decrease (three white soldiers). Because if the trend in that period shows sideways or consolidationIt is possible that the pattern appears to give false signals.

Secondly, you can wait for the confirmation candle to form completely after candle C before starting to open a position. Thirdly, make sure that the tail size in this pattern is not long. This is because the long tail can indicate that the appearance of the pattern is only temporary.

After seeing the size of the tail You can also use the price charts with shorter timeframes to see the price patterns that formed after or in the middle of the formation of these two patterns. This price pattern on a shorter time frame will give you a more detailed picture of price dynamics.

Finally, don’t forget to use technical indicators. Candlestick patterns are just visual representations without data calculation results. supply and demand which exists to make your trading data more complete and your strategy effective. You can use technical indicators such as Relative Strength Index (RSI) to indicate that the market is experiencing overbought or oversold conditions.

The weakness of the three white soldiers and the three black crows.

Both of these candlestick patterns also have weaknesses. The main disadvantage of both patterns is that this pattern can appear in the middle of a sideways trend. As a result, careless traders will be caught in false signals. in fact The emergence of these two patterns when the trend is sideways. It doesn’t always mean turning around.

Another drawback is the chance of the pattern going deeper. three black crows. Traders with a short selling style can benefit from this. But traders with long position strategies need to be careful. use other indicators to predict whether a deeper decline will occur or not.

Finally The trading volume of these two formats plays an important role. The larger the candlestick or trading volume, the higher the volume. On the other hand, if the trading volume is small, you should be careful.



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