Three White Soldiers and Three Black Crows Trading Strategy Binary Options 2020

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Three White Soldiers and Three Black Crows Trading Strategy

Normally, the Three Black Crows Pattern in an uptrend signals the bearish reversal of the trend. And, in a downtrend, it signals the continuation of the trend in the same direction. In this way, the traders are able to identify the movement of a prevailing trend. If you use it effectively in your binary trading, you can derive immense profit out of it. Read on to know how you can do it without a mistake.

Identifying Three Black Crow Pattern

The Three Black Crow Pattern sends moderate signals of possible reversal during an uptrend . These signals are not strong enough. Only when such a formation occurs in an established uptrend, a trader should rely on its patterns. The signals send by these patterns help the traders to predict that a downtrend is inevitable with the weakening of the uptrend.

Individually, the three candlesticks have no lower wick and they show that the price is declining gradually. Generally, they are bearish and are long. Despite this fact, when they become exceptionally long and show gradual declining of the price, it is indicating that your asset is being overvalued.

I recommend trading this reversal pattern only when a major support or resistance level is hit.

Trading Using Three Black Crows Strategy

By using this pattern, the traders through short selling can take advantage of the reversal situation in a bearish market. When the candlesticks form the Three Black Crows pattern, sellers should be sure of the fact that they have gained absolute control over the market as long as this pattern stays.

All the candlesticks intermit close to their low points to demonstrate significant decline in the price movement. When sellers are comparatively in a strong position than buyers and the buyers are not opposing them, it indicates that very few buyers are enthusiastic about investing their money in an underlying asset. As a result, the reversal of the trend can be of huge importance.

Another great way to trade successfully using this pattern is to adopt the position of short sell with a stop loss that is placed with the closing of the third candle. After that, try to sell your asset at the price point located in the middle of the third candlestick.

You can see that even on a real chart, these patterns work.

On the contrary, many a time, prices experience a slight increase when the third candle closes. However, you shouldn’t expect them to cause a limit order by reaching the highest point in the chart. In this case, if the price touches the lowest point of the third candlestick, you should opt for buying put option.

Just above the second candlestick’s high point, try to place a stop loss order. You can place this order also above the point where the first candlestick opens. Considering whether you want to undertake a low or high risk trade, you should place your stop loss order.

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You can also use this pattern for binary trading by identifying an uptrend. However, the uptrend should have candles arranged in ascending orders. After that, wait till a reversal takes place. This reversal should be characterized by candles arranged in descending orders. Then, you can go for put option when the third candlestick closes.

To sum up, the three black crows are very advancing. The bear market is in oversold condition when each of the three candlesticks is quite long. If this happens, it’s better to not to enter the trade until you get the confirmation of approaching reversal.

Being just the opposite of the Three Black Crows perpetual structure, the Three White Soldiers comprises of three primary bullish candlesticks. In the following article you will get an insight about its respective pattern and the ways to implement it into binary options trading.

Three White Soldiers and Binary Options Trading

The Three White Soldiers pattern is basically a reversal confirmation pattern, which becomes useful over time to derive meaningful signals for forex, binary and equities. The pattern comprises of three consecutive primary candlesticks, which closes at higher points as compared to the previous day. (Or a candle) As the prices close at superior levels, it results in to a staircase formation, indicating a trend reversal.

The formation of the Three White Soldiers Pattern

Factors responsible for identifying this typical pattern:

  1. Each of the consecutive bullish candlesticks closes at higher prices than the former ones.
  2. Three important, consecutive and boosting white candlesticks comprises of this formation.
  3. The former candlestick paves the way for the new consecutive candlestick.

The Three White Soldiers pattern evolves when the markets suffer from low prices for a substantial period of time. This time is marked by new lows or is working its way towards new lows. To win against these lows, the market needs to push itself upward as demonstrated by the organisation of the first candlestick. For the coming two consecutive days, the markets will tirelessly compel the candles to close at higher points. This constant mobilisation of the market will eventually dampen the positions of the investors, who have a pessimistic view on markets.

To dictate an imminent downfall of the markets, The Three White Soldiers pattern is an ideal formation. For chart analysis and revealing the necessary outcomes, binary options traders must look forward to implement it. However, it works best for those binary options which boasts of longer expiration time periods of 24 hours or more. Some options like RANGE and ONE-TOUCH features somewhat highest percentage payouts.

I recommend trading this reversal only when a major support or resistance level is hit.

Three whit soldiers pattern on a real chart.

Some of the Best Assets to Trade with This Formation

For better trading, volatile currency pairs, like EUR/JYP, GBP/JYP and GBP/USD are considered to be the best. Due to their high volatility, you will be able to gain and realise profits faster and effectively. Also, to trade on other assets like stocks, commodities and indices you can use this formation.

Under this pattern, a price movement towards a single direction for a very long time is observed along with a downward trend. Apply binary options strategies like TOUCH and OUT-RANGE, depending on your need and requirement. OUT-RANGE is generally applied when the price channel is cracked and TOUCH is used when the prices reach a fixed price level.

However, just keep in mind that the expiration time of these options would be 24 hours, because the pattern have scopes for only medium-term trading.

As the Three White Soldiers boasts of a formidable formation, the signals it exudes are around 85% accurate. Hence, you enjoy plenty of ways to enhance your profits. Higher chances of generating profit can also be witnessed by higher payout ratios for options, like TOUCH and RANGE and longer expiration time period.

Summary of these patterns trading

Owing to its strength and generation of higher profits, the Three White Soldiers is effective for binary options trading. Generating signals for imminent downtrend is a major attribute of this pattern; hence traders like to implement it with binary trading options for better returns and profit ratios

THE THREE BLACK CROWS

Surely, brokers would dislike the fact that their traders could steadily earn any sort of profits. However, even a minority of their members should still be able to gain or even the “stingiest” of these brokers would be forced suspend.
For the health of any broker, it will always be in their interest to allow a percentage of such winners, as they carefully control a balance between those with revenue and those without.

Yes, so these winners exist, but how?

However, one must wonder… are these systems the real deal, or just another chance for me to waste even more?
We consider these strategies suitable and satisfactory, they have sprung with the help of the most classic of techniques, and aided from all those who have been deeply involved in the experience through binary options.

A definition of a good strategy is to be clearly explained and well understandable, or risk leaving the trader in a myriad of doubts that would ruin their confidences to proceed. In such a case, a broker would provide the best impression possible, by providing strategic tips that would help maintain such confidences. Though many are still losing anyhow.
But for the broker, the mission would have been accomplished, they have robbed you blind and they are satisfied.

Advertising a broker that caters to those too ignorant to know anything about ‘binary options’ is no longer the profitable route to business. Most traders have been burned for far too long and as a consequence have become increasingly careful and alert. So it seems that we have become bombarded with ads and messages disguised as ‘insightful’ and ‘clever’, to hide the fact that they need our attention to extend the scam.

It is time to expose the reality that their arguments have failed to be shown in the necessary light and clarity. We will do our best to deliver such a promise and to provide our traders with the helpful guide they deserve. We see ourselves, then, to be a part of those who can succeed.

So we begin with the first of the series:

The Trading System

The trading strategy “3 Black Crows” is aimed at to find the downward reversal on the uptrend

Find a strong uptrend consisting of several ascending candles in a row.

Closing of the third candle is a signal for an uptrend turning to a downtrend.

Find Out More

Downtrend

Meanwhile, here will surface the name: Three Black Crows.
It refers to a shape (or pattern) of candles which is used to predict a change of the current trend from positive to negative.
Although the name refers to a situation of rising trend, it is clear that the rules also apply to the trend that heads on the opposite, with the necessary and logical changes made.
Three candles would pattern in a long and definited body, each of which has the closure lower than that of the previous candle.
The appearance of the candle combination of these Three Crows is a sign of lack of confidence by investors in the current uptrend.
This pattern is used to predict the end of an upward trend, and traders often confirm this signal through other technical indicators to make sure that the “momentum” is about to change.
The “several ascending candles” in succession indicated by IQ Option is to be considered indicative and not to be taken literally.
Indeed, the candles can also be interspersed with one or more small bearish candles.
It is up to the traders to assess the strength of this positive trend.

No doubt this figure of three candles, the “Three Black Crows”, is considered a very strong signal of change, especially when following a trend that is strongly heading upward.

The first candle would be formed by a long body, typically with a short upper and lower shadow, driving the price in the opposite direction after a decided uptrend.

The two following candles opens within the body of the previous candle, and they will shut quite significantly below the closing of the latter.
The reason why this pattern is considered a strong indicator of a changing course in the market is given thanks to the disappearance of the upward trend, replaced by a very strong and sustained sell signal.
Of course there is also the reversed pattern, which is formed in case of transition from negative to positive trend, that is, oppositing of what has been presented and all that has been previously explained this will also apply to the opposite case.
The name of this new figure would be “The Three White Soldiers“.
The color patterns, black or white, reminiscent of that used in some graphics, white and black for candles bullish to bearish ones.

Entry Strategy

A common entry strategy used in forex and binary options is applied when the trader identifies the pattern of the Crows, and consequently place themselves into a PUT option by the end of the third candle.

For example, if the value by Eur/Usd has reached an uptrend that is 1.1300, and the first two candles which is presumed to be prepared to form the pattern bring the price down to the value of 1.1260 (4 pip less), with the second candle that closes at 1.1260 and the third which opens and closes at 1.1265 to 1.1240, then the trader would prefer to purchase in PUT as soon as the next candle opens.
Next to the pattern of the 3 crows, whatever its value may be, the closure of the third candle in the Crow pattern confirms the downtrend.
Of course, if the pattern of the three black crows is not fully formed it will suspend entry.

Conclusion

The strategy described here is not our interpretation of what is briefly mentioned by IQ Option, but a trading technique also described by other noteworthy sites.
Often clear and understandable, these is confirmable by researching through the web.
If applied correctly it should provide interesting results.

Nobody forbids to combine the technical input to another indicator with which it is familiar.
Remember that any trading systems too complex, cluttered with too many indicators, will often result in disappointing outcomes.
Simplicity, money managing and tranquility rewards a trader. Fundamental rules that must be respected.

Let us hear from each other soon on the next trading strategy clarifying these other IQ Option tutorials.

Happy Trading
FreeOne Traders Team

Three White Soldiers Three Black Crows Forex Trading Strategy

I want to cover a Forex trading strategy that is based on 2 candlestick chart patterns and they are called:

  1. The Three White Soldiers Candlestick Pattern
  2. Three Black Crows Candlestick Pattern

Both of these candlestick chart patterns work in combination with each other and for the sake of simplicity, let’s just call it the “3 white soldiers and 3 black crows trading strategy“.

First, let’s look at these chart patterns in detail.

THREE WHITE SOLDIERS CHART PATTERN

The three white soldiers pattern is a bullish reversal candlestick pattern and it consists of 3 bullish candlesticks and this is how it is formed:

  • The market has to be in a downtrend.
  • You then have 3 green bullish candlesticks that form consecutively giving you the three white soldiers chart pattern.
  • Each candlestick must open within the candle body of the previous candlestick
  • Each candlestick must close higher than the previous candlestick

When you see the three white soldiers pattern formed in a downtrend, you should at least take notice because it is a potential signal that a trend change may be happening.

One thing you want to see is that these candlesticks scream “bullish” when you look at them. We want to see long candle bodies which indicates either many new buyers entering the markets or those traders that are short, are taking profits.

THREE WHITE SOLDIERS CHART PATTERN

THREE BLACK CROWS CHART PATTERN

The 3 black crows chart pattern will be exactly opposite to the three white soldiers chart pattern shown on the chart above.

The three black crows pattern is a bearish reversal candlestick chart pattern that consists of 3 bearish candlesticks.

Here is how the three black crows chart pattern forms:

  • The market has to be in a uptrend.
  • You then have 3 bearish candlesticks form consecutively giving you the three black crows chart pattern.
  • Each candlestick must open within the candle body of the previous candlestick
  • Each candlestick must close lower than the previous candlestick

If you see the three black crows chart pattern form in an uptrend market, you should take notice as this is a potential signal that a trend change is on the horizon.

THREE BLACK CROWS CHART PATTERN

Trading 3 Black Crows and 3 White Soldiers

The benefit of this trading strategy is that no indicators need to be used. We are looking at pure price action and allowing the movement of price to dictate how we are going to trade.

  • Time Frame – As with any chart pattern trading strategy, they tend to work better on the higher time frames however you could use these intra-day.
  • Currency Pairs – Any currency pair that is currently trending is a good candidate for one of these reversal patterns.
  • Indicators – Nothing but pure price action so no trading indicators are needed.

Trading Rules

  1. If a three white solider pattern is formed, place a buy stop order 3-5 pips above the high of the 3rd candlestick OR if a three black crows chart pattern form, place a sell stop order 3-5 pips below the low of the 3rd candlestick.
  2. Place your stop loss above the 3rd candlestick’s high if you placed a sell stop order or place a stop loss below the 3rd candlestick’s low if you entered a buy stop order.
  3. Take profits may be placed targeting previous swing highs or lows (peaks or bottoms).
  4. Move stop loss to break even when price moves by the amount risked or move stop loss to break even when price has made a swing high or swing low.
  5. Learn to take partial profits off the table when price moves at least halfway point to reach your take profit target level.

Important Trading Tip

Not all 3 white soldiers or 3 black crows patterns that you see on forming on your charts are created equal and should be used as a trading signal.

Like most trading patterns or even single patterns like the fakey, location and context matters. Look for zones such as:

  • Support and resistance levels
  • Pivot levels
  • Fibonacci levels

These are levels of significance especially when used on the higher time frame charts. Any place or level apart from these levels should be trade carefully because you really don’t have a reason to expect price to move up or down (inflection points).

You also want to be careful trading after a consolidation. Once price breaks out of consolidations, there is a strong chance that price will reverse and retest. If you are in a 3 white solider or 3 black crows trading position, you may get stopped out due to the nature of market movement.

DISADVANTAGES OF THIS FOREX TRADING STRATEGY

  • Every Forex strategy has its weakness and one of the weakness of this strategy is the fact that sometimes, the distance moved by these two patterns are so huge already and if you enter a trade, your stop loss needs to be so far away. This can result in a very small position size.
  • It may be a temporary reversal only when these patterns form and next thing you know, you will get stopped out.

ADVANTAGES OF THIS FOREX TRADING STRATEGY

  • If this Forex strategy turns out as planned, and if its in a good trending market after the formation of these patterns and you take a trade, you can make a lot of profitable pips easily, especially if you take trade in the larger time frames like the 1hr and above.

I hope you enjoyed learning about “3 white soldiers and 3 black crows trading strategy“. Please remember that all trading strategies should be tested before using real money!

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