Triangle and 3 Outside Up Candlestick Forex Trading Strategy

Traders are always on the lookout for breakout opportunities on the trading chart as a mean of generating profits.

The Triangle and 3 Outside Up Candlestick forex trading strategy is a well suited strategy that combines the triangle pattern and the 3 outside up candlestick trading pattern to confirm breakout with a high degree of accuracy.

Chart Setup

MetaTrader4 Indicators: SmPriceBend-T01.ex4 (default setting), Triggerlines2.ex4 (Input Variable modified; Rperiod=52), Trendline.ex4

Preferred Time Frame(s): Any

Recommended Trading Sessions: Any

Currency Pairs: Any pair

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Download the Triangle and 3 Outside Up Candlestick Forex Trading Strategy

Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy entry if the following indicator or chart pattern gets displayed:

  1. If price breakout above the descending triangle as seen on Fig. 1.0, it is an indication that price is being pressured upward i.e. a trigger to buy the specified currency pair.
  2. If the bullish 3 outside up candlestick pattern (candlestick 1, 2, &3) takes shape after “rule #1” as seen on Fig. 1.0, a bullish signal is said to be in the offing, hence a trigger to buy the asset of focus.
  3. If the blue lines of the Triggerlines2 custom indicator aligns somewhat below the candlesticks as shown on Fig. 1.0, a bullish signal is said to be looming.
  4. If the gold line of the SmPriceBend-T01 custom indicator breaks above the 0.00 level as illustrated on Fig. 1.0, price is said to be pushed higher i.e. a signal to buy.

Stop Loss for Buy Entry: Place stop loss 2 pips below immediate support or below the descending triangle.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions take precedence:

  1. If price breaks below the lime colored support line of the descending triangle, an exit or take profit is advised.
  2. If the lines of the Triggerlines2 custom indicator turns red during an ongoing bulls market, it is a signal to exit or take profit at once.
  3. If the gold line of the SmPriceBend-T01 custom indicator break below the 0.00 level, it points to a diminishing bulls power, thus an exit or take profit is recommended.

Sell Entry Rules

Enter a sell order if the following holds sway:

  1. If price breakout below the ascending triangle as seen on Fig. 1.1, it is an indication that price is being pushed downward i.e. a trigger to sell the specified FX pair.
  2. If the bearish 3 outside up candlestick pattern (candlestick 1, 2, &3) takes shape following “rule #1” as seen on Fig. 1.1, a bearish signal is said to be in the cards, hence a trigger to sell the asset of focus.
  3. If the red lines of the Triggerlines2 custom indicator aligns somewhat above the candlesticks as shown on Fig. 1.1, a bearish signal is said to be approaching.
  4. If the gold line of the SmPriceBend-T01 custom indicator breaks below the 0.00 level as shown on Fig. 1.1, price is said to be taken lower i.e. a signal to sell.

Stop Loss for Sell Entry: Place stop loss 2 pips above immediate resistance or above the ascending triangle.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If price breaks above the lime colored resistance line of the ascending triangle, an exit or take profit is advised.
  2. If the lines of the Triggerlines2 custom indicator turns blue during an ongoing bears market, it is a signal to exit or take profit at once.
  3. If the gold line of the SmPriceBend-T01 custom indicator break above the 0.00 level, it points to a halting bears power, thus an exit or take profit is recommended.

Sell Trade Example

Fig. 1.1

Free Download

Download the Triangle and 3 Outside Up Candlestick Forex Trading Strategy

About The Trading Indicators

A trend line is a negative or positive slope that is formed by connecting two or more high or low points respectively.

The Triggerlines2.ex4 is a custom indicator that is designed after the moving average but is made up of two lines, with changing colors, red for bears and blue for bulls.

The SmPriceBend-T01.ex4 indicator is used in gauging the first price change derivative or simply the speed of trend and its sign.

Three Outside Up candlestick pattern is comprised of three distinct candles.

The second candle is expected to engulf the first candle. The third candle should open immediately higher, forming as small a wick to the downside/upside as possible.

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