3rd Candle Indicator

3rd Candle Indicator

The 3rd Candle Indicator for MT4 identifies trend reversal signals based on the 3rd candlestick strategy.

3rd Candle is a trading strategy in the Forex industry where three specific candlestick patterns are used to identify potential trend reversals. It is a short-term reversal trade setup based on a specific sequence of candlestick patterns on the chart followed by a confirmation candle.

Typically, the first two candlesticks establish a trend, which could be bullish or bearish, while the third candlestick confirms a trend reversal. The strategy is one of traders’ best scalping strategies in the Forex market to catch short-term price reversals.

Therefore, the 3rd Candle Indicator for MT4 is a trend reversal indicator developed based on the 3rd candle trading strategy. It displays an arrow when it identifies a valid 3rd candle formation pattern. Scalpers can use the indicator to catch small pips from the market. It is also suitable for beginner/intermediate and seasoned Forex traders.

How to Trade with the Indicator

The above image depicts the action of the 3rd Candle indicator for MT4 on the EUR/USD currency pair in the H4 timeframe.

The blue arrow suggests a bullish reversal for buy entry, while the red arrow suggests a bearish reversal for sell entry. However, relying solely on the indicator’s signals for buying and selling may not be sufficient.

Therefore, traders should combine the signals with price action (e.g., bullies/bearish engulfing, etc.) or any other technical indicators before opening a buy/sell position. For instance, a trader may use a bullish candlestick chart pattern to confirm a buy signal (refer to the above screenshot) before buying an instrument.

Also, note the effectiveness of the indicator is dependent on the timeframe being used. So, ensure to backtest it using different timeframes before using it.

Conclusion
The 3rd Candle indicator for MT4 is one of the best trend reversal indicators that provides probable buy and sell entry. It is suited for beginners, intermediate, and experienced traders.