Recently, in the Olymp Trade trading community, there has been a heated debate about whether the pattern or candlestick pattern is a more effective way to make money when trading Fixed Time Trade. In this article, I will present the advantages and disadvantages of using Japanese candles and introduce to you the Three Black Crows candlestick pattern with the highest accuracy. From there, it is possible for you to compare different trading strategies to choose for yourself the optimal way to make a profit when trading.
Especially, the multi-account function of Olymp Trade helps me get individual statistics for each account without affecting others. This is a new function that brings many benefits to the user for a better experience.
- 1 Advantages and disadvantages of Japanese candlesticks
- 2 Three Black Crows is the most accurate bearish candlestick pattern
- 3 Review opened orders with the Three Black Crows candlestick pattern
- 4 To conclude
Advantages and disadvantages of Japanese candlesticks
One candle may not be able to show the behavior and trend of prices in the future. This is because it can only represent the current price behavior. However, if we analyze a whole cluster of Japanese candles (including many candles in a specified time period), things will be different. Therefore, the advantages that we point out below are for a cluster of candlesticks. On the contrary, the disadvantages come only from an individual candle itself.
Japanese candlesticks have a clear difference in color between the two types of bullish and bearish candles. It has a shadow that is easy to observe. Investors can distinguish each specific trading session.
The Japanese candlestick shows the trend of the price in the future. This is because it shows whether the force of buying or selling is dominant at present. They are capable of providing signals to identify an upcoming trend in price. It may be a continuation of an old trend or a price reversal and the initiation of a new trend.
A technical indicator can help investors predict the direction of future prices. However, when analyzing that indicator on the Japanese candlestick chart, it will help investors to find a top or bottom position to get higher profits than the individual signals that technical indicators provide.
A Japanese candlestick shows only the prices of a specific session. It does not, by itself, show the direction of price. Therefore, when analyzing, investors can not only look at the current candle but have to look at the overall, past candles, to determine the correct trend of the price.
A Japanese candlestick cannot show its internal price movement. If you look at the D1 candlestick, you will only know whether the price goes up or down on that day and which side is dominant. However, you won’t know how prices have moved that day. It may go up continuously or fluctuate up and down abnormally but still remain in an uptrend.
This downside is also a note for you when analyzing the Japanese candlestick chart. That is, when analyzing the Japanese candlestick pattern, it is necessary to combine observations on many different time frames to see the price behavior more clearly and accurately.
Three Black Crows is the most accurate bearish candlestick pattern
Three Black Crows is the most accurate bearish pattern. They often appear in the bull zone and warn of the possibility that the price could drop again.
How to identify a Three Black Crows candlestick pattern
Three Black Crows is a visual pattern that is easy to identify with the naked eye. However, you should also note the following:
- Appear during an uptrend or in a pullback of a downtrend.
- 3 three candles in the pattern must all be bearish and have a long body, short shadow.
- The opening price of the next candle should be either above or equal to the closing price of the previous candle.
- This pattern shows a bullish to bearish reversal signal.
Notes: The original Three Black Crows candlestick pattern requires the opening price of the following candle to be above the closing price of the previous one (i.e. a gap). However, in high-liquidity markets, there is no need for a gap at the opening.
Meaning of the Three Black Crows candlestick pattern
When the market is in the high for too long, the Three Black Crows pattern appears showing signs of reversal. Or it could be a confirmation for the immediately preceding reversal patterns.
Three consecutive bearish candles with short shadows show that sellers have maintained a good and penetrating pressure.
After each strong bearish candle, the sellers panic and sell out more. Therefore, the price may decrease stronger and stronger for the following candlesticks.
This pattern also shows a big change in market sentiment. That could be the consolidation of a previous resistance zone. Or it could be a setup for a new resistance zone.
The reliability of this pattern is very high. However, we still need a later confirmation in the form of a bearish candle with a lower closing price or a bearish gap.
Review opened orders with the Three Black Crows candlestick pattern
- Only open DOWN orders when encountering the Three Black Crows candlestick pattern.
- Do not open orders with an expiration time below 5 minutes.
- Do not trade 30 minutes before and after breaking news release.
- EUR/USD currency pair.
- Balanced investment
Patterns with a high win rate usually don’t show up much during the day. So when opportunities arise, you must be decisive.
1st order: At EUR/USD on March 1st, a Three Black Crows candlestick pattern appeared. Opened a DOWN order with an expiration time of 30 minutes when the pattern was confirmed for $200. Result: I won and received a profit of 82% of the investment.
2nd order: At EUR/USD on March 2nd, the price broke out of the previous support. At the same time, the Three Black Crows candlestick pattern appeared to close a candle below the support zone. Opened a DOWN order when the pattern was confirmed with a 30-minute expiration time.
3rd order: At EUR/USD on March 3rd, two interlocking candlestick patterns appeared, continuing the downtrend. Opened a DOWN order when the Three Black Crows candlestick pattern was successfully confirmed with a 30-minute expiration time.
4th order: It was still at the EUR/USD pair in the European session on March 3rd. Opened a DOWN order when the Three Black Crows candlestick pattern was successfully confirmed with a 30-minute expiration time.
It sounds very easy, right? Just wait for the correct candlestick pattern to appear and then click to make money. It takes patience to wait for really good opportunities to appear. The formula for making money in Olymp Trade is as simple as that. But planning is one thing, doing it right is a very different thing.
Don’t rush to make money. I’m sure you won’t be able to dig out any money. Please take a look at what you have learned in this article. Test its effectiveness on a Demo account thoroughly. Finally, you can come to the real battle when the statistical results always show a stable profit.