Started by RoboForex, Apr 01, 2022, 06:22 am
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In candlestick analysis, all patterns can be divided into two groups - trend continuation patterns and reversal patterns. Today, the article is about the Three Black Crows pattern belonging to the second group. This is definitely not the most frequent pattern on the chart yet experienced traders who use candlestick analysis are well acquainted with it.
After a lengthy ascending impulse and a lot of purchases market players start closing their positions. The price forms a minor gap, and the first candlestick out of the three comprising the pattern opens above the previous closing price or at the same level.
Then the second candlestick opens at the close level of the first one, and after it closes in its turn, the third candlestick opens. The opening price of the third one coincides with the closing price of the second one or belongs somewhere close to this level. Next, the trend reverses.
This pattern can be used both alongside other means of analysis and on its own. Indicators act as additional filters that enhance trade efficacy.
Here, the popular Stochastic Oscillator with basic settings is used.
On the chart below, the quotes reached the potential TP level. The position could have been closed at that moment. Otherwise the trader had to wait because the price started correcting.
Here, the Stochastic Oscillator and MACD with basic settings are used.
On the chart below, the price reached the target TP level and began a correction.
Before using Three Black Crows, the trader needs to study all of its conditions and peculiarities. The strategy is t be tested alongside other means of market analysis.
For example, the trader can try out those indicators they are used to. This will help filter signals from Three Black Crows.
The post How to Trade Three Black Crows Candlestick Pattern appeared first at R Blog - RoboForex.
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