Pattern - "Three White Soldiers"

Hello everyone,

I am constantly working on new strategy ideas and really enjoy sharing with the community.

Strategy Name: "Crows and Soldiers Mean Reversion"

Description: The strategy combines the power of candlestick patterns (Three White Soldiers and Three Black Crows) with trend confirmation from a moving average.

Indicators/Patterns Used:

1. Three White Soldiers Pattern
2. Three Black Crows Pattern
3. Moving Average (MA) with Angle

Strategy Logic:

1. Trend Determination using Moving Average:
   1. Calculate a simple moving average (SMA) of a suitable period (e.g., 50 or 200) on the price chart.
   2. Determine the angle of the SMA. A positive angle indicates an uptrend, while a negative angle indicates a downtrend.

   
   
   

2. Three White Soldiers Pattern (Long Entry):
   1. Look for the occurrence of the "Three White Soldiers" pattern.
   2. Confirm that the SMA is indicating an downtrend (negative angle).
   3. When both conditions are met, consider it a potential long entry signal.

   
   
   

3. Three Black Crows Pattern (Short Entry):
   1. Look for the occurrence of the "Three Black Crows" pattern.
   2. Confirm that the SMA is indicating a uptrend (positive angle).
   3. When both conditions are met, consider it a potential short entry signal.

   
   

   Attached Image (click to enlarge)

   
   
   
   
   

MT4 Testing Results:
Single symbol from 2000 -> 2023

Trade View X Portfolio Results:
Portfolio testing over 5 years





Any suggestions or comments to further progress this strategy idea would be really amazing.

Thanks,
Icy

Thanks for sharing your ideal.
Allow me to ask a few questions to know more about ur Strategy: what TF do u use? And can u give more information about ur Entry, SL, TP?

What time frame did you use for the test?

The backtest should be done on tick and with data at 99%, furthermore it seems without stoploss or with grid. The peaks in equity and then back down to breakeven or little profit are generally for this reason.

The rules suggest if it's a downtrend, you're looking to buy - but the image above the MT4 results shows the opposite if I'm reading it right?

So is it look for a buy if it's a downtrend, and look to sell if it's an uptrend?

uhhhh.... your rules given in steps 2 & 3 --- don't match what is shown in the graphic you attached

Hi Tango,

Thanks for pointing this out.

I was testing it in both direction, Trend Trading, and Mean Reversion styles and it seems I posted the picture of the wrong version.

Thanks Jinch,

As the blocks themselves are really easy to move around I was doing some testing in both directions and it seems I posted the wrong picture.


I am very grateful that you have actually read the first post and noticed the error, it makes me happy to keep posting more ideas.

how much would have been lost on the previous signal before the boxed 3 candles in the pic?

Hi a3trader, thanks for the message.


It would not have triggered a position until this point when the 3 bars formed.

Backtesting the “Three White Soldiers” and “Three Black Crows” with an Automated Expert Advisor...






We went through an Expert Advisor (MQL4 EA) that automatically trades the Three White Soldiers (bullish reversal) and the Three Black Crows (bearish reversal) patterns.

We’ll also explain its smart money management features, the ATR-based stop loss logic, and how you can tune it to your own preferences.


Read the full article here

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