3 Candle Chart Indicator For MT4
The 3 Candle Chart Indicator For MT4 plots 3 candles per trading day that depict the nature of price action of the below sessions: 1. Candle 1 - Open of London Trading to New York Open 2. Candle 2 - New York Open to London Close 3. Candle 3 - Close of London Trading to New York Close The indicator works only on the hourly time frame.
Trading ideas with the 3 Candle Chart Indicator For MT4
This indicator breaks down the daily movement of the market into three specific candlesticks as per the trading sessions of the current day. So the first candlestick marks the open of the London session and the open of the New York session and then the second candlestick marks the New York open to the Close of the London session.
The final candlestick marks the Close of the London session to the Close of the New York session. This trading indicator can only be applied to the 1 hour time frame. Which works out well because it comes along with a subscript or numerical label which numbers the days within a trading week - as you know that there are only five trading days per week.
Therefore, you will have Monday labelled as one, Tuesday labelled as two, Wednesday as 3, Thursday as 4 and Friday as 5.
It allows you to easily recognize which day of the week it is at a specific point in time. Because when you are analyzing the market whilst tracking back to see what has transpired in the past - it becomes pretty difficult to look at the date and then automatically determine what day of the week it is.
With this numerical label of 1 to 5, you can simply refer to the number and then quickly pick up which day of the week it was at any given time in your chat history.
3 Candle Chart Indicator For MT4 - Reversals
The abovementioned trading sessions have their own candlestick expressions which contains three to four 1 hour candlesticks. This enables us to analyze the market movement within a specific trading session relative to a candlestick pattern.
So if you find that the market throughout one session has given you a doji pattern, then you know that the market went through a phase whereby equal buying and selling pressure was applied. However, this could possibly lead to a reversal in the coming days. It is almost like having three 4-hour candlesticks overlaid on your 1-hour chart.
With this principle now embedded in your mind we can pursue this philosophy further by you looking out for more candlestick patterns as per the three candle indicator. By that I mean, we can look at trading sessions 1, 2 or 3 and see if it has maybe given us a bullish or bearish engulfing candlestick pattern, and then maybe use this as a basis to open up the reversal trade or simply just to get market information of the forthcoming trend.
There are a lot of ways in which you can go about using this indicator so do not feel hesitant to explore other trading ideas which could see you yield fruitful and consistent results. As for the bullish engulfing or bearish engulfing trading idea that I mentioned earlier - I have identified one or two trading opportunities of this nature just to show you what they look like.
And if you do not already know what a bullish or bearish engulfing candlestick pattern is, it is basically two consecutive candles with the body of the second candlestick completely overshadowing or engulfing the preceding candlestick. Those are the basic rules to go by in order for you to identify the candlestick pattern of this natures.
I will start with the example below, in this case it is a bullish engulfing candlestick pattern which I identified using the three candles indicator. The way you would detect and exploit such an opportunity is that you will wait for the high of the second candlestick of the engulfing pattern to be broken if it is a bullish engulfing pattern.
But if it is a bearish engulfing pattern you wait for the price action to break the low of the 2nd towering candlestick. Below you see exactly what I am talking about in terms of how to actually trade it. I have referenced both bearish and bullish engulfing patterns within one screenshot.
The above trading examples that were identified clearly illustrated the power and potential of this indicator if or when used correctly.
Those of you who are seriously looking at implementing this trading system or trading idea in your training portfolios - you should do so with an intense amount of simulating and testing so that you can unearth the relevant feedback that requires you to make the necessary adjustments and upgrade before you officially deploy it in your trading portfolio.
3 Candle Chart Indicator For MT4 - Conclusion
The 3 Candle Chart dnicnator is an excellent tool to be endowed with in your trading exploits. It brings abut a level of sophistication that makes analyzing the market seamless. There are three four-hour candles formed on the hourly-time frame to give you an idea of the nature of the market activity.
In this sense, we used it to great extent to discover higher time frame reversal candlestick patterns which play a strong role in defining the direction of the market on the hourly and lower charts.