Third Candle with Stochastic

Profit: 10 pips per trade. 5-10 trades a day. You can use this strategy anytime you want,

there are always very strong signals ( I will explain below..) The system will work on many

Forex pairs and many major Stocks. The rules to this system are simple, and executing and

managing trades will take no more than five minutes of your time. The only tricky part is

bringing your knowledge base up to speed with the strategy so this becomes a five-minute

process.

Let me introduce you to the four simple steps below. Then I’ll take you through some worked

examples in order to illustrate just how easy this system is.

This trading system involves 3 simple steps.

1. Identify a current trend

2. Identify your entry signal

3. Place your trade

Manage your trade later.

The system  in action 

1. Find the third candle

2. Enter your trade at the start of the third

candle

3. Close your trade in a few minutes with 10

pips profit.

Below I will show you what to do – step by step. The system works fine for me on 5 minutes or

15 minutes charts, but it work on other timeframes as well.

Setup:

-Identify the current trend.

(For example: use 200SMA or 200EMA to identify the current trend. If the price is above the SMA –the current trend is up or opposite)

-Open a 5 min or 15 min and find the “first candle”.“The First Candle” is between two candles, and it is the highest or the lowest of those three candles.

Look at the chart below:

The 1 st candle is located between two candles and it is the highest (or lowest ) of the 3.

-Now if you look to the right of the 1 st candle is the 2 nd candle and the next is the 3 rd candle –

the most important for us. This system based on the 3 rd candle.

If look on your chart you will see a lot of “three candles figures” and all of them are great trading opportunities! Usually each trade will brings you 10 pips profit:

Trades with third candle

We BUYat the very beginning of the 3 rd candle if the current trend is up and your candles

figure is going up We SELL very beginning of the 3 rd candle if the current trend is down and your candles figure is going down.

Take profit

Your target is 10 pips. You can also try to use a trailing stop order to maximize your profit.

Stop loss needs to be placed above or below the second candle: If you BUY – place a stop 1 pip below the 2nd candle, if you SELL – place a stop 1 pip above the 2nd candle.

When not to trade

- do not trade 1 hour before and after major news or big events

- when the 3 rd candle is against the current trend

- when the second candle closes “inside” the 1 st candle:

You may also use a Stochastic indicator with parameters 5.3.3 to filter your trades. If the direction of the stochastic is opposite of your 1 st and 2 nd candles it is better not to trade at that moment and wait for the next “1 st candle figure”.

Third Candle with Stochastic

Indicators:

EMA 50 Time Frame 5- 15 min, EMA 21 TF 30 min and 60.

EMA 200 Time Frame 5- 15 min, EMA 50 TF 30 min and 60.

Stochastic 5,4,4. close.

Time frame 5 min or higher

Buy

Pattern third candle and stochastic oscillator crosses upward,.

Sell

Pattern third candle and stochastic oscillator crosses downward.

You can use this strategy also with binary options high/low.

Expiry time 2-3 candles.