3 30 Formula in Trading

Application of the 3-30 formula helps you in identifying the market trends and to obtain the desired results, you will have to combine price action and moving averages. 

For the identification of the right direction of the market, you will have to involve a 30-minute candlestick chart and deploy three moving averages. Furthermore, the market trends can be realised by relating the moving averages, and the price. 

The 3 30 formula strategy is applied for the bank nifty index. And, below are the ways to study the candlestick patterns that show the price and the lines that move across the chart for the exponential moving averages.  

When the price of the stock and 3-EMA have a sufficient gap then the strategy fits into, and swings in that gap. 

Gap gets established between 3-EMA and the price, and steadily makes the investor take the following steps. 

The investor will intend to buy or sell the stock and for that the 3 30 formula analysis defines certain facts. 

Selling Scenario: 

If the 3-EMA follows below the price, then the investor shall get to see the gap between the 3-EMA and the 30-minute candle. 

One can find a first green candle, second green candle, and a hammer pattern. 

It means, the strategy begins to trade, and an investor can enter into the low of the candle, and the applied stop-loss will have to be high. 

Buying Scenario: 

If the 3-EMA moves  above the price, then you can find a gap between the 3-EMA and 30-minute candle. 

An investor will observe a red candle , 2nd red candle, and a hammer pattern. The investor shall make an entry in the high of the candle and the stop loss will be low.