3 line break trading strategy

net Short Profit Profit Factor.22.39 Winning Trades 158 86 Losing Trades 256 113 Win Percentage 38 43 Largest Winning Trade 862 583 Largest Losing Trade The results show. A long reversal can only occur when the market has closed above the high of the previous 3 lines. Steve Nison introduced and popularised candlestick charting into the west. . Then wait until a reversal line has formed and enter in the direction of the reversal. . Another common way to use 3 line break charts is to combine them with Japanese candlestick patterns. This allows us to tailor the strength of the reversal needed to declare a change in trend direction, or change in line color. Once a green(bull) candle is formed after the end of red candles wait for it to close then go long and once a red (bear) candle forms and closes after green candles have finished just go short. If neither of the above two conditions are met, no new line is produced. Daily highs and lows are not shown on the line break charts, just closing prices. Significant price moves occur when the closing price is higher or lower than the preceding bars.

Rules for shorts are the inverse. Trading with 3 Line Break Charts. As you can see from the construction rules, white lines are only drawn if the daily bar closes above the previous line, or if the daily bar closes below the lowest low of the last three lines. Why use 3 Line Break Charts? The chart above is a 3 line break chart of the daily YM and in this case the construction rules are as follows, assuming the last line on the chart was a white line : If the close of the daily bar is higher than the high. If we compare the previous Dow Jones 3 line break chart with the standard candlestick chart it looks entirely different. The numbers on the bars indicate how single bars or groups of bars on the daily chart relate to the white or red lines on the 3 line break chart.

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The following chart shows the Dow Jones on the daily timeframe using 3 line break charts. Test the strategy using an optional 200 period EMA as a filter. You can view the latest models in the. The test was carried out on the EUR/USD forex pair on the 4-hour timeframe between December 2009 and June 2015. The 3 line break charts can be used to identify the dominant trend and then the candlesticks are used to time trade entries. Fawwaz, a simple but powerful strategy but needs improvement for exit and take profit, sometimes it will have losses(very few) but all in all u will always be in profit, I'll describe it here and lets all improve it and beat the brokers together, here. This allows us to adapt them for day trading or swing trading systems.