Candles Pattern indicator
Knowledge of candlestick patterns helps a trader to make a qualitative analysis of the market situation and make the right trading decision. Indicators can help in this work. Today I will tell you about one of them - the Three Candles Pattern . He notes a popular pattern that occurs quite often on the price chart - "Three Candles". The indicator will not allow the trader to miss a favorable entry situation. In MT4, this technical analysis tool is installed in a standard way. And this is how it looks on the chart:
I would like to note that the Three Candles Pattern indicator works correctly on any trading instruments and timeframes. In this regard, it is, in fact, a universal analysis tool.
There are few parameters in the settings, and they all relate to the design of the indicator.
You can specify the colors for displaying bullish and bearish patterns on the chart.
There are parameters that allow you to select the type and thickness of the lines.
Using the corresponding parameter, you can "fill" the triangles with the selected color, or you can refuse such "filling".
In general, if not necessary, you can leave the parameters at their default settings. However, the color and general design of the chart and indicators sometimes affect perception. It should be comfortable.
How to use the Three Candles Pattern in trading
First of all, I want to say a few words about the pattern itself. It represents three consecutive candles with the same direction. That is, either three bullish candles or three bearish candles. Depending on where they are formed, a trading decision is made to buy or sell.
If three candles appear on the chart after a strong and prolonged trend movement, then there is a high probability that they signal a possible trend reversal. In accordance with this, it is necessary to make a decision to open a trading position. That is, you should open an order in the opposite direction.
If three candles appeared on the chart at the beginning of an incipient trend, then most likely it is a correction. It can be used to open a trade in the direction of an existing trend at a favorable price.
In general, I would not recommend trading only on this indicator. It can be a useful addition to a working vehicle. The indicator shows good trading results when used with important support and resistance levels. It can also strengthen or, conversely, weaken the signals that are given by other indicators included in the trading strategy.
The Three Candles Pattern should be tested on a demo account.