If you are looking to significantly increase profits in a short time, learning to trade with proven candle patterns may be the key to your success. Thomas Bulkowski has researched and identified the most reliable candle patterns for predicting market trends. With the right strategy and risk management, these candle patterns can help you grow from $100 to $1,000 in just three days. Here’s how to do it.
Step 1: Understand the Basics of Candle Patterns
Before starting, it's crucial to understand what candle patterns are and how they work. Candle patterns are shapes on the price chart that signal reversals or continuations in price. Bulkowski's research has ranked these patterns based on accuracy, helping you focus on those with the highest probability of success.
Each candle pattern below is displayed along with the percentage accuracy based on Bulkowski's historical testing. This percentage helps you select the patterns that have the best potential for profit.
Step 2: Choose the Right Market
Since you are targeting large profits in a short time, choose markets with high volatility and liquidity. Popular options include:
Forex (currency pairs with frequent volatility)
Cryptocurrency (known for large and rapid price movements)
High volatility stocks (especially in technology or biotech sectors)
These markets provide plenty of trading opportunities and significant price movements, helping increase profits when trades go in the right direction.
Step 3: Identify and Trade Bulkowski's High Probability Candle Patterns
Let's explore Bulkowski's top candle patterns and how to trade them.
Bearish Three Line Strike (84% Accurate Reversal to Up)
Pattern Description: Consists of three consecutive red candles, followed by a green candle that opens lower but closes higher than the first red candle.
Trading Method: Open a long position after the green candle closes, indicating a high likelihood of a bullish reversal.
Profit Taking Strategy: Set targets near the closest resistance level or use a trailing stop to protect profits.
Three Black Crows (78% Accurate Reversal to Down)
Pattern Description: After an uptrend, three long consecutive red candles appear with short or no wicks.
Trading Method: Short immediately after the third red candle confirms the downtrend.
Profit Taking Strategy: Aim for the nearest support level to take profits, as this pattern is very reliable in predicting bearish reversals.
Abandoned Baby (70% Accurate Reversal to Up)
Pattern Description: This candle pattern shows a bearish gap, followed by a small candle and a bullish gap, signaling the potential for a trend reversal.
Trading Method: Open a long position when the market shows signs of a bullish reversal after this candle pattern.
Profit Taking Strategy: Target the nearest peak or use a trailing stop to follow the bullish trend.
Evening Star (72% Accurate Reversal to Down)
Pattern Description: This pattern consists of a large green candle, a small-bodied candle, and a large red candle.
Trading Method: Short when the third candle completes, indicating a high likelihood of a downtrend.
Profit Taking Strategy: Set targets at the nearest support level, as this pattern often leads to a strong downtrend.
Inverted Hammer (65% Accurate Continuation to Down)
Pattern Description: A single candle with a long upper wick and a small body below, often appearing in a downtrend.
Trading Method: If a red candle follows, consider shorting as this pattern suggests a continuation down.
Profit Taking Strategy: Target the next support level to capitalize on the downward momentum.
Bullish Three Line Strike (65% Accurate Reversal to Down)
Pattern Description: Consists of three consecutive green candles, followed by a red candle that opens higher but closes lower than the first candle.
Trading Method: Short after the fourth candle as it suggests a potential bearish reversal.
Profit Taking Strategy: Aim for the nearest support level to take profits.
Step 4: Manage Risk
The goal of achieving high profits in a short time also means accepting greater risk. Below are some ways to manage risk:
Position Size: Keep each trade small, ideally 1-2% of your account to minimize potential losses.
Stop Loss: Set a tight stop loss just after the confirmation point of the candle pattern to avoid large losses.
Use Leverage Cautiously: Leverage can amplify profits but also increases losses. Start with low leverage to control risk.
Step 5: Execute and Monitor Trades Over 3 Days
With the goal of maximizing profits within three days, you can apply the following strategy:
Day 1: Spend the first day scanning for candle patterns that signal high probability reversals or continuations. Start with small trades to get familiar with each candle pattern.
Day 2: Increase trade volume for reliable setups as you gain more confidence in identifying candle patterns. Adjust profit targets and stop losses according to market volatility.
Day 3: Focus on the patterns with the highest accuracy like Bearish Three Line Strike and Three Black Crows. Use profits from previous days to execute final trades.
Conclusion
Trading based on Bulkowski's candle patterns can provide a significant advantage, especially when aiming for quick profits. However, always remember that trading carries risks, especially in short timeframes with large amounts. Practicing these candle patterns on a demo account first will help you understand their movements before trading with real money.
By using high-probability setups, managing risk effectively, and choosing the right markets, you can maximize your chances of success. Remember that each trade requires thorough analysis and patience - successful trading is about making calculated decisions, not impulsive ones. Wishing you successful trading and good luck in the market!
