Trading at Olymp Trade like a professional gambler
Have you ever thought about traders as gamblers? There are some similarities, although more differences. What they do have in common is that both groups are trying to identify patterns and are relying on the probability of improving their chances. But in terms of money management strategies, traders prefer to play more conservatively and not to put all their resources into one trade. Gamblers, on the other hand, are willing to place huge sums on a single bet.
Consider yourself a gambler today, because I want to present you with a strategy straight from a gambling world that you can successfully apply in trading. This strategy is called the Martingale system and is among the most controversial strategies in professional gambling.
We will use the Martingale system along with the candlesticks patterns. It is simply because candles are better for analysis. Observing the colors of the candles can be a good way to determine what the next candle could be.
Important things to remember before trading candlesticks at Olymp Trade
You will have to choose the timeframe for your chart, which means how long one candle lasts. Most of the time I am using 5-minute candles, which means that after this time one candle is finished and the next starts to develop.
Then you have to specify when exactly the candle begins. The best thing to do is to aim at 00 seconds so that your candle will start and end at 00 seconds. You may find it more difficult than it sounds. But the good thing is you can practice as much as you need on the Olymp Trade demo account.
We distinguish two types of candles. Candles that are red in color are called the bearish ones, and the green candles are called the bullish ones. Another thing is that there are many different special candles you will encounter during your trading journey. Regular candles can usually be described by a large body and short shadows or no shadows at all. The special ones have often a small body and a long shadow. Take a look at the picture below. You can view there some special candle formation you should avoid in our system.
And the system that I mentioned, called the Martingale system, is based on increasing the investment amount each time you lose. So if I trade $1 and I lost, I will triple the amount next time I open a position. If I lose again, I triple the previous amount again. But if I win, I will start everything from the beginning and I will place only $1 in the next trade.
Our gambling system combines the Martingale strategy with the rule of 3 candles.
The way the strategy in question works
The concept is quite simple. Your task is to observe the chart and distinguish three consecutive candles (remember to avoid special candles.) The direction of the position depends on the color of the candles. Whenever three candles are noticed, trade at the fourth one in the opposite direction.
For example, you are analyzing the chart and observe a downtrend. Finally, three successive red candles are formed. There is no special candles or a green candle among them. When the third candle is finished, you enter a long position. If you win, you will stop trading for a while and wait for another cycle of 3 bearish or 3 bullish candles to develop. When you spot it, you will go against the market’s direction. And so on and on.
This strategy is largely based on the color of the candle displayed right before you begin trading.
Using this strategy on the Olymp Trade platform
I am trading the EURUSD currency pair but you can, of course, choose a different asset. If you decide so, I recommend trading those with a return of at least 82%. This way you can be sure that using the Martingale system will bring you healthy earnings.
The exemplary trading will be carried out with the predetermined sum of $364. It will then be divided into 6 separate transactions as displayed in the table provided below.
You should always consider the time of trading carefully. I choose morning hours for the EURUSD currency pair. Moreover, I am trading for about one hour only. Such a procedure allows me to escape the effects of significant events and news that could influence the market. After around an hour, I stop trading and withdraw the earnings.
Look at the example below.
You can see the candles you should look out for. After three consecutive candles in the same color, you place an order against the market direction. In the first situation, this resulted in a loss, that is why I opened another position and tripled the investment amount. This time I won. The second time three candles of the same color appeared, I opened a short position and won.
This is just an exemplary way of trading. You will only see if you like it or not after a bit of practice. And this is why I always suggest using the Olymp Trade demo account first. Another reason for using the practice account is that the Martingale system demands that you increase the investment amount each time you experience a loss. It may put a lot of pressure on you. It is important to keep your emotions in check and the free demo account is simply an excellent place to practice this skill.
Hints for trading with the Martingale system at Olymp Trade
The Martingale system is designed to trade 5-minute candles or longer. Anything below 5 minutes will be too short to analyze the candles properly and enter a successful trade. Especially when you need to modify the amount you place in a consecutive transaction.
Be ready for waiting. Sometimes it takes a while until the three candle pattern will develop. Remember that the pattern cannot include a special candle nor a candle in a different color. Plus, candles are supposed to begin at 00 seconds.
You should set the amount you can invest beforehand. Do not recharge the account to cover the potential losses. Stick to your plan. I was trading with $364 and I would not top up my account even in case of losing it all. Moreover, once I gained the profit and my hour of trading was about to finish, I closed all the positions and withdrew the money.
Fill in the trading amount manually. There are special +/- buttons that are supposed to make entering the amount simpler. However, from my experience, filling this field manually is much quicker. And saving time is especially important when you are going to open a transaction in a very short time.
Once again, do not hurry things. This is the waiting game. Whenever the 3 candles rule works well for you, you should just sit back and watch the chart patiently until the pattern will repeat itself. It is not very complicated and will surely generate a profit for you.
Pros and Cons of the Martingale System and Candlestick Patterns👍👎
- 📈 Can improve the probability of successful trades by identifying patterns
- 💹 Combines two strategies for a more comprehensive trading approach
- 🧪 Allows for testing and adaptation to individual trading styles
- 💰 Involves increasing investment amounts after a loss, which can be risky
- 🧘 Emotional control and discipline are crucial to avoid impulsive decisions
- ⏰ Time-consuming, as it requires continuous observation of the chart
|Martingale System Characteristics
|Candlestick Patterns Characteristics
|Increases investment amount after a loss
|Helps identify potential market trends
|Requires emotional control and discipline
|Can be combined with other trading strategies
|Can be risky if not managed properly
|Helps traders make more informed decisions
The closing words about the Martingale system combined with the 3 candles rule at Olymp Trade
I trust you get a general idea of how to use the Martingale system along with the 3 candles rule. However, nothing works better than practice.
Open a free Olymp Trade demo account, if you haven’t yet, and try the strategy for yourself. After you fully understand how it works and you feel confident, you can move to your real account and start doing your best to earn. Keep in mind, though, that no single strategy will eliminate risk, you must still expect to lose some resources here and there.
I would like to hear your impressions and views. Please share them with the community in the comments section which you will find further down the site.
I wish you profitable trading!
Frequently Asked Questions🤔
- Q: How does the Martingale system work in trading?A: The Martingale system increases the investment amount after each loss, with the goal of recovering previous losses when a winning trade occurs. This strategy can be effective if managed properly, but it can also be risky if not applied with discipline and emotional control.
- Q: What are candlestick patterns and how do they help in trading?A: Candlestick patterns are visual representations of price movements in a given time frame. They help traders identify potential market trends and make more informed decisions about when to enter or exit trades. Candlestick patterns can be combined with other trading strategies for better results.
- Q: How can I practice the Martingale system and candlestick patterns?A: You can practice this combined strategy on the Olymp Trade demo account, which allows you to test your skills and strategies without risking real money. This way, you can fine-tune your approach before applying it to real trades.
- Q: How important is emotional control when using the Martingale system?A: Emotional control is crucial when using the Martingale system, as it involves increasing investment amounts after a loss. It’s important to avoid impulsive decisions and stick to your predetermined plan, which can be challenging when emotions run high. Practicing on a demo account can help improve emotional control.
- Q: Can I use the Martingale system and candlestick patterns with other trading strategies?A: Yes, the Martingale system and candlestick patterns can be combined with other trading strategies to create a more comprehensive and well-rounded approach. It’s essential to test and adapt your strategies to your individual trading style and risk tolerance.
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