Advanced Candlestick Patterns for Forex Trading

Lebona Jeso
Jul 10, 2017 · 3 min read

There are simple and convenience-oriented candlestick patterns, meant to serve traders of all backgrounds and experiences. And there certain more sophisticated patterns that would require greater skill and experience for it. However, these more advanced patterns have the potential to generate greater profits if used in the right manner as part of the forex trading strategies being used. Usually, they involve three candlesticks or more, and they have specific qualities that one needs to look for.

‘Bearish three black crows’ pattern

When it comes to advanced candlestick patterns, the first among them would be what we call the ‘bearish three black crows’ pattern. This emerges only during a powerful upwards trend. Having identified this candlestick, a trader can be fairly certain that a reversal in the price pattern is waiting to occur.

With this pattern, there are three candlesticks, of which the first is presented at the top of an upward trend. This first candlestick needs to have a long formation, and it depicts a lower closing price than the price in which it opened. This candlestick would represent the first crow. Now, the second crow is meant to seem the same as the first one, except for the fact that the opening price emerges in the lower portion of the first candlestick’s body. The third crow would also be of the same formation as the first two, but it has the same connection to the second as the second would have to the first. The completed pattern would appear as a set of stairs uniform in nature, pointing downward. It could also resemble three crows gazing down whilst seated on a tree. This is the source of this pattern’s name.

‘Three white soldiers’ pattern

A second advanced pattern one can use while trading is known as the ‘three white soldiers’ pattern. This pattern could be attributed with similarities to the earlier one, except for an opposite nature in its function. The name ‘three white soldiers’ derives from the ability of this pattern to forecast upward trends in the forex trading market.

This formation only emerges at the base of a down trend, and when it appears it occurs on a similar backdrop as that of the three black crows. However, the candlesticks represent a rise from the opening price to the closing one. The subsequent pattern formed looks similar to a flight of stairs pointing upwards, contrary to the same stairway pointing downwards with the black crows’ pattern.

Tri-star pattern

The third pattern to be discussed for forex trading in South Africa is the tri-star pattern. This formation could be considered rare, but it is of extreme value when it does come to appearance. It involves three stars, the middle one among which is raised above the other two. If this pattern evolves over an upward trend, a reversal in the price patterns could be predicted. Meanwhile, the opposite would represent a reversal from a downward trend.

These are just some of the common advanced patterns that one can acquaint himself with. However, experts in this field would be prone to using many more patterns and tools. If you need assistance in this regard, then engage reliable Forex brokers in South Africa. WesternFX is an international brokerage based in Canada, with clients across the continents. If you need help getting a deeper analysis of this business spectrum, then we could offer you a helping hand!

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WesternFX is one of the most established and well-known forex brokers in South Africa providing bespoke trading facilities to both individual and corporate.

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