Three White Soldiers-Three Black Crows Swing Trading System

Three White Soldiers & Three Black Crows, what’s these got to do with forex swing trading???

 

Well, relax, these are the names given to two very specific reversal candlestick chart patterns shown below:

 

  1. Three white soldiers pattern

 

The three white soldiers pattern is a bullish reversal candlestick pattern and here is how it forms:

 

  • first the market has to be in a downtrend.
  • next you have 3 green bullish candlesticks that form-giving you the three white soldiers chart pattern.

 

Usually when the three white soldiers pattern is formed, it signals the end of the downtrend.

 

 

  1. Three black crows pattern.

 

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 got to be first in an uptrend.
  • then three bearish candlesticks from-the three black crows.

 

Once the three black crows are formed, usually it signals the end of the uptrend.

 

 

HOW TO TRADE THE THREE WHITE SOLDIERS & THREE BLACK SOLDIERS PATTERN

 

Do you need to trade all the 3 white soldiers or 3 black crows patterns that you see?

 

No.

 

The location where these chart patterns form is very important. You want to be able to trade these chart patterns  in areas of:

 

  • support and resistance levels
  • pivot levels.
  • Fibonacci levels

 

It does make more sense to trade these chart patterns on these kind of level as there will be more significance involved.

 

THE TRADING RULES ARE VERY SIMPLE

 

  1. if a three white solider is formed, place a buystop order 3-5 pips above the high of the 3rd candlestick or if a three black crows 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 breakeven 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.

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Posted By marykeating : 31 August, 2020
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