Three Little Indians Trading Strategy Again, this strategy doesn’t require any professional trading indicators.
The Three Little Indians trading strategy is a pure price action trading strategy that has the potential to reward us instantly. The rules for this setup are pretty simple (sell signals):
First, you need three consecutive symmetrical peaks (swing highs). The time that passes between the development of each swing high is more or less the same. Enter a short position once the market turns below the 20% range of the second peak. Place your protective stop loss above the newly formed swing high. * It is required that at the top of the last high or low, a candlestick reversal pattern is formed. Whether it's a Hammer, a Hanged man, a Morning or Evening Star, Bullish or Bearish Engulfing, or another pattern.
Basically, we’re trying to anticipate when the third swing high will get formed. If we wait too long, our profit margins will shrink. Read more about swing trading in forex here.
Note* this chart pattern works on the daily chart as much as it works on the lower time frame. We like to trade the Three Little Indians trading strategy on the 5-minute chart.