Binary Options 3 Candle Strategy

Many traders call back that the near complicated strategy is the one that works best. However, from feel, simple strategies, such equally the three candle strategy are the best. The reason is that you don’t need to rely on many different indicators to catch the perfect trade entry indicate. Besides working with too many indicators can draw you lot away from your primary objective – making money.

One of the elementary and effective trading strategies I utilise is the 3 candle strategy. That’southward my focus in this guide today.


  • 1
    What is the 3 candle strategy?

    • one.1
      What is a 3 candle reversal?
  • ii
    An case of how to apply the rule of 3 candles on IQ Choice

    • 2.1
      The use of martingale money management with 3 candle strategy
  • 3
    Tips for trading using the three candle strategy on IQ Option

What is the three candle strategy?

This strategy is based on candle charts. So you won’t be using line or area charts when implementing information technology. If y’all’re new to different types of charts, have a look at these two articles:

Guide to the IQ Pick Price Charts

Candle Stick Patterns You Will Come Across When Trading on the IQ Option Platform

The 3 candle trading strategy uses 3 aforementioned-colored candles that appear consecutively. Use the Japanese candlestick chart. In improver, these are concentrated candles (or accept relatively short shadows). The reason why we use 3 consecutive candlesticks is that they’re more than accurate to read than special candles.

Now on the IQ Option platform, your first objective is to identify a tendency. If it’s a downtrend, the candles will have crimson bodies. Uptrends will have candles with light-green bodies. Along with the trend, you’ll need to identify iii consecutive candles of the same color. One time you lot reach the third candle, your trade should exist confronting the trend because the fourth candle in that sequence is likely to exist of the opposite color.

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probability when tossing a coin

This strategy’southward rules are like to a money toss. The first toss produces a 50/50 gamble of either heads or tails. If the first toss is heads, the probability of the second toss resulting in heads drops to 25%.

The third toss resulting in heads farther drops to 12.five%. Equally you continue tossing the money, the probability keeps dropping. That’s how the 3 candle strategy works.

If you get 3 sequent candles of the same colour, chances that the fourth will be of the same color have dropped significantly. That’s why you should enter a merchandise betting on the opposite color.

What is a 3 candle reversal?

The idea of 3 candle reversal is actually the essence of today’s strategy. Similarly, ane can ask what is the 3 candle rule? The answer is the same. The market in a given interval draws a candle. The candle is either up or down. If a sequence of the same iii candles appears on the nautical chart information technology is quite likely that at least a curt term reversal will occur. This short term reversal is when we should have an option open up in the opposite direction to these 3 candles of the same colour.

An example of how to apply the rule of three candles on IQ Choice

You volition be working with trends. So, it’s a thing of identifying which candles are dominating at a certain fourth dimension (green for uptrends, cerise for downtrends). Ignore the price and only focus on the candle color.

At present, similar to the money toss, your objective is to predict the colour of the side by side candle. Since you don’t know exactly what it is, you’ll refer to the previous three candles. If the previous 3 are scarlet, chances are that the next candle will be green. Take a look at the chart below.

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rule of 3 candles
rule of three candles in a live chart

Where to enter your trades:
If you have iii consecutive reddish candles, your trade entry point is at the end of a candle. That is correct when the side by side candle is starting. Every bit you lot might have guessed, you should place a higher trade. If there are 3 sequent greenish candles, your lower order should come up right after the third candle ends.

What if your trade loses? Enter the aforementioned gild for the adjacent candle. Then if you have iv consecutive green candles your trade entry point should be at the end of the fourth candle. Still, it should exist a put order.

The apply of martingale money direction with 3 candle strategy

Information technology is possible to use the martingale for this 3 candle strategy. I wrote a while ago that afterwards a losing position, another trade should exist opened in the same direction. The martingale volition consist of increasing the amount to compensate for the loss fabricated in the preceding transaction. Allow united states assume that the first transaction after the appearance of 3 candles of the same greenish color resulted in a loss of $iii, because this was the prepare amount for this option. For the next transaction, we will employ a multiplier of the position size x3, then the amount volition be $ix. If this second transaction is successful and the option payout was fourscore%, the net profit will be:

-iii$ (first merchandise) + ix$ ten eighty% (second merchandise) =
= – 3$ + 7.two$ =

If this second trade also ended in a loss, the amount for the 3rd option trade would be 3 10 $9 or $27. If the third trade finally ends in a series of successes, and so we have reached:

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– 3$ – nine$ + 27$ x 80% =

Tips for trading using the 3 candle strategy on IQ Option

Before implementing this strategy, you lot should outset analyze the chart’south history. Do you run into trends that apply to the three candle strategy. It also helps to know if there’s upcoming news or events which might affect your currency pair. If there’s whatever, avoid trading that pair.

Remember that you won’t be following the prices. Rather, information technology’s the candle color. Your entry points should be right where the third candle ends and the quaternary begins. This ways just a few seconds to react.

You might be tempted to increase your trade amount after a losing trade. Doing and so might be unsafe. What if the side by side trade loses? The best matter is to stop trading and clarify the chart looking for the next favorable 3 candle pattern.

Have you lot traded using the dominion of 3 candles pattern? If so, share your experience with 3 candle strategy in the comments department below.

Practiced luck!

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Fulltime Day trading, and aid Iq option wiki in my spare time to build an awesome platform to help beginners out at that place. #digital-nomad, traveling all over the world.