Tested: the 3-candle rule, year by year

Hi,

This week's tested strategy, run on our own data: the 1-2-3 Candle. Here are the rules, so you can try it on your own charts:

• Candle 1 is red.
• Candle 2 is a bigger green candle with the highest high of the three.
• Candle 3 is red again.
• Buy when price is over candle 2's high at 3:45 PM. Target +5%. Stop −10%. Out on day 30 if neither hits.

We ran it on every stock our scanner watches since June 18, 2024. 1,265 trades have finished:

• 2024: 70% closed in profit, +1.31% a trade (114 trades)
• 2025: 72%, +1.54% a trade (646 trades)
• 2026 so far: 69%, +1.10% a trade (505 trades)
• Last 90 days: 70% (155 trades)

How they ended: 822 at the +5% target, 233 at the −10% stop, 210 out on day 30. Across all of them, +1.34% a trade.

Why a stop twice the size of the target works here: it held up every year, so the win rate carries it. That's the test we want a strategy to pass before we send it to you.

Ryan Brooks's scanner runs this rule every day at 3:45 PM. See every trade it has finished.

The Trading Strategy Guides Team