As you learn certain signals in Forex trading, it is important to identify them quickly so that you can respond accordingly. While a dual candlestick pattern is great, a triple candlestick pattern is even better. This pattern is helpful because it could be an indication of how the price is going to behave next. You might even notice a triple candlestick pattern that is a reversal pattern. This could mean that a new trend will develop next. Other triple candlestick patterns are continuation patterns. How can you tell the difference?
The Morning and Evening Star
First, you might notice morning stars and evening stars, which are examples of triple candlestick patterns that indicate the current trend is going to end. With the evening star pattern, the first candle is bullish, the second candle has a small body, and the third candlestick shows a reversal in trend. This is one triple candlestick pattern that you should spot quickly, letting you know that the trend is reversing.
The Three White Soldiers and Black Crows
Another triple candlestick pattern you might notice is called the three white soldiers pattern. This takes place when three long, bullish candles develop. It usually happens following a downtrend, meaning that a reversal pattern is taking place. This is a potent pattern, which usually takes place after a long downtrend and a period of consolidation. The second candle needs to be larger than the body of the previous candle. The last candlestick should be the same size or larger than the second candle.
The three black crows pattern is the opposite of the white soldiers triple candlestick. This takes place when you notice three bearish candles at the end of a long uptrend. This also indicates that a reversal is likely to happen next. The second candle body needs to be bigger than the first candle body. The third candle should be the same size or larger than the second candle.
The Three Inside Up and Inside Down
You might notice the three inside up triple candlestick pattern at the end of a downtrend. This indicates that a trend reversal is taking place. You should look for a long bearish candlestick at the bottom of a downtrend followed by a second candle that reaches the midpoint of the first candle. Finally, the third candlestick needs to close above the high of the first candle. This indicates that the reversal is taking place.
The three inside down triple candlestick pattern takes place following an uptrend and is an indication that a reversal is likely to take place next. You should notice a long bullish candlestick at the start of the pattern. Then, the second candle needs to reach the midpoint of the first candle. Finally, the third candle needs to close below the low point of the first candle. This is an indication that a reversal is going to happen next.
Practice Spotting These Signals
Even though it takes some practice to spot the triple candlestick pattern, they should help you make a prediction on what a specific Forex currency is going to do next. If you can respond quickly to these signals, you might be able to increase your returns. Try spotting these triple candlestick patterns and see if they work well for you.