3 Consecutive Candles Method.. | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

M candles / Custom candles for second charts 1 reply

Consecutive Candles - trading system idea 28 replies

Consecutive candles indi combined with volume & spread indi 13 replies

Calculating only buy candles vs sell candles 2 replies

Code To Check If There Are Consecutive Sell or Buy Candles 1 reply

Attachments: 3 Consecutive Candles Method..
Exit Attachments

3 Consecutive Candles Method..

  • #1
  • First Post: Oct 14, 2009 2:53am Oct 14, 2009 2:53am
Hi guys,

Thought I'd try and get some discussion and input into this very, very simple system. I've seen it on various forums across the net, but did a little search here and couldn't find anything, so apologies if this has been covered already.

Sometimes simplicity really is best and to me this really brings that home.

H4 chart, any pair, 50EMA High, 50EMA Low. Use this channel as your overall trend.

Entries: Look for 3 consecutive candles in the same direction as trend, enter 2 pips above/below of close of 3rd candle.

Exit: Still unsure, i'm looking at ATR x1.5 for SL, ATR x2 for TP. Obviously the management is the most important part so any input would be great.

I haven't done any significant backtesting as of yet, merely eyeballed a few charts. If it hasn't been covered already I can start testing it a little more seriously.
Attached Image (click to enlarge)
Click to Enlarge Name: gj.jpg Size: 143 KB
  • #2
  • Oct 14, 2009 7:04am Oct 14, 2009 7:04am
No-one interested? Shame.

AUSUSD looks incredibly good, EURJPY, GBPUSD, AUDJPY. I'm going to investigate further.

I'll also try and organise an EA.
  • #3
  • Oct 14, 2009 8:48am Oct 14, 2009 8:48am
It's very easy to do statistical studies of candlestick patterns. Rather than do backtesting, export the bar data to a spreadsheet and analyze it there.

You could do an analysis that reports what percent of the time price moves x pips in your favor after breaking above/below the third candle without moving more than y pips against you. You'd have good statistical data for SL and TP values as a result.
You are in a maze of twisty little passages, all alike.
  • #4
  • Oct 14, 2009 10:04am Oct 14, 2009 10:04am
Steve,

What is the easiest way of exporting data to excel? I am trying to test something similar and wouldn't mind testing his method either. Thank you.

Quoting stevegee58
It's very easy to do statistical studies of candlestick patterns. Rather than do backtesting, export the bar data to a spreadsheet and analyze it there.

You could do an analysis that reports what percent of the time price moves x pips in your favor after breaking above/below the third candle without moving more than y pips against you. You'd have good statistical data for SL and TP values as a result.
{Promotion Removed}
  • #5
  • Oct 14, 2009 10:05am Oct 14, 2009 10:05am
Quoting stevegee58
It's very easy to do statistical studies of candlestick patterns. Rather than do backtesting, export the bar data to a spreadsheet and analyze it there.

You could do an analysis that reports what percent of the time price moves x pips in your favor after breaking above/below the third candle without moving more than y pips against you. You'd have good statistical data for SL and TP values as a result.
Hi Steve,

That sounds very interesting. I'm still relatively new to Forex (June 09) so still a little unfamiliar with certain things.

To export data, do I use the history centre? (F2).

How could I quickly identify 3 consecutive candles and making sure they were conforming to the 50EMA channel?

Any help appreciated.
  • #6
  • Oct 14, 2009 11:52am Oct 14, 2009 11:52am
Looking at the past recent charts there are plenty of profit trades a EA would be great.
Koyco
  • #7
  • Oct 14, 2009 11:13pm Oct 14, 2009 11:13pm
Quoting Koyco
Looking at the past recent charts there are plenty of profit trades a EA would be great.
Koyco
Yeah it certainly looks good to the eye. I'm going to try and attempt a serious backtest using Steve's advice, if I can work out what I need to do! lol.

In theory, this method should avoid ranging conditions as to have 3 consecutive candles means 12 hrs of continual movement in one direction. Anyway I hope a few more people visit this thread, I think it can go a long way. Just because it's simple doesn't mean it doesn't work.
  • #8
  • Oct 15, 2009 12:55am Oct 15, 2009 12:55am
Hi DubaiTrader,

Thank you for presenting another very interesting concept here. I believe that this strategy has great potential as it operates on a high timeframe and ensures that trades are taken in the direction of the immediate trend. Of course, one would still have to consider the direction of the overall trend (long term), and respect key support and resistance levels. It would be great to get the backtesting going to see the true potential of this strategy. I wish you all the best on your journey. Happy trading!

fxpilot
  • #9
  • Oct 15, 2009 12:59am Oct 15, 2009 12:59am
Three valid setups here, all trending up. Interestingly, all 3 worry me! lol, I'm not sure how long GU can sustain it's short term uptrend. Anyway, let's see how they go. I'm aiming for ATRx2. SL is ATRx1.5.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: au.gif Size: 85 KB
Click to Enlarge Name: gj.gif Size: 92 KB
Click to Enlarge Name: gu.gif Size: 93 KB
  • #10
  • Oct 15, 2009 1:05am Oct 15, 2009 1:05am
Argh! Can someone tell me a correct image size when saving pics from MT4? I used 1500x1500 and they've come out way too big. 1280x1024?
  • #11
  • Oct 15, 2009 1:37am Oct 15, 2009 1:37am
Please google 3 white soldiers and 3 crows. They are actually regarded as possible signs of a reversal. Food for thought.
  • #12
  • Oct 15, 2009 1:43am Oct 15, 2009 1:43am
Quoting fxpilot
Please google 3 white soldiers and 3 crows. They are actually regarded as possible signs of a reversal. Food for thought.

Hi Pilot,

Yeah I saw that, they also use bollinger bands and daily charts. 3 consecutive days of growth or loss is 72 hrs! All I'm looking for is 12hrs of consecutive growth for a qualifier and obviously I'd need another few hrs going in the same direction for a win.

Thanks for the link though..
  • #13
  • Oct 15, 2009 3:16am Oct 15, 2009 3:16am
Well GJ has hit it's target already! 150 pips. Didn't expect it that quickly!
  • #14
  • Oct 15, 2009 3:31am Oct 15, 2009 3:31am
GU nailed +140 pips also. ATRx2.

Waiting on AU now, could be a while. Hell, even if it loses, still a fantastic start, even if I am talking/debating with myself.
  • #15
  • Oct 15, 2009 6:14am Oct 15, 2009 6:14am
Nice trading DubaiTrader. Lots of movements in the markets with volume, liquidity and momentum. good job.
  • #16
  • Oct 15, 2009 8:03am Oct 15, 2009 8:03am
Lots of pips on GU at 8 GMT today although malfuntion on FXDD at that time wipped out a lot of profit for me.
How about putting BermacTrade Manager EA on charts to capitalise on big trends like this morning.
There looks to be some poor trades on other pairs at 12 GMT an thoughts on a filter?
Koyco
  • #17
  • Oct 15, 2009 12:13pm Oct 15, 2009 12:13pm
Quoting DubaiTrader
Hi guys,

Thought I'd try and get some discussion and input into this very, very simple system. I've seen it on various forums across the net, but did a little search here and couldn't find anything, so apologies if this has been covered already.

Sometimes simplicity really is best and to me this really brings that home.

H4 chart, any pair, 50EMA High, 50EMA Low. Use this channel as your overall trend.

Entries: Look for 3 consecutive candles in the same direction as trend, enter 2 pips above/below of close of 3rd candle.

Exit: Still unsure,...
Hi Dubai.
Actually the 3 consecutive candlestick method is known as "the 3 soldiers method".
Your idea of trading in line with the 5o ema high/low channel is a twist on the 3 soldiers method that I have not heard.

I eyeballed the 1 hour chart and it looks pretty good. I like the 1 hour chart because you get more trades than a higher time frame chart.

I think the idea here is to play for big trades and try to scratch the losers.
Just by eyeballing the 1 hr. chart, taking profits when the high average starts to turn down (if you are long) seems like a good way to let your profits ride.

I haven't found an ideal stop but I will let you know.

I will Demo this method and keep you posted.

Regards,
Michael
  • #18
  • Oct 21, 2009 4:32am Oct 21, 2009 4:32am
AU lost last week but GJ today netted +175 pips.

I've changed entry conditions to the hi/lo of the 3rd candle, not the close. This avoids quite a few nasty trades. Also the trade has to qualify within the next candle.

I'll try and post live trades from now on to keep this thread moving forward.
  • #19
  • Oct 21, 2009 9:14pm Oct 21, 2009 9:14pm
[quote=Also the trade has to qualify within the next candle.

[/quote]


What do you mean by the trade has to qualify within the next candle?

Mitch
  • #20
  • Oct 21, 2009 9:25pm Oct 21, 2009 9:25pm
This seems interesting, I've always been a fan of candle patterns, there's just so many of them I get confused lol, But this one looks very easy to follow, have you considered what kind of effect a ranging condition would have on the system?

Also, if you would like to test out my SmartStop system when in use with this, feel free to, I believe it will get you out of a trade at an optimal position as this is a trend catching system.

To include my smartstop, just slap 1 or 2 MA's (most likely just one for this kind of setup) and shift it 1 or 2 positions, Period of 1-2, apply to price median, and set the MA to be Smooth. If it pans out well with your system
0 traders viewing now