Day trading with the candlestick strategy

I receive many emails from traders about their achievements. One comes from October 2018. In fact, it was quite a good week for many. The money starts at \$1,000 which is 3 times more than the usual amount. The earnings for three days in October stopped at 7,5%.

Trading with the candlestick strategy entails observing the color of the candles and using the Martingale system. The chart for the EURUSD currency pair is set for 5-minute candles and the positions are being held for 5 minutes as well. You can check the article about candle color strategy for deepening your understanding of this method.

Contents

Given the amount of 3 times, there has to be 1 order opened 3 times. 1 cycle constitutes 6 subsequent trades for a total sum of \$1,000. That is as follows: Trade 1: \$3, Trade 2: \$9, Trade 3: \$27, Trade 4: \$81, Trade 5: \$243, Trade 6: \$637.

The problem with the Martingale strategy is that it is followed by an enormous psychological burden. If the first three cycles are not going well, you will have to enter the fourth with the amount of \$81. If you lose this one again, next time you will be struggling to open the trade at \$243. It feels incredibly insecure. But let’s look at the end of October logs.

The points of entry on October 29th

There were three cycles that day. Cycle number one won in the first order, cycle number 2 in the fourth trade, and number 3 in the fourth again. The final result was pretty impressive thanks to two cycles that won in the fourth trades (with the amount of \$81.)

Note: keep in mind that the cycles must alternate. One bullish cycle, then the bearish one, again bullish, and so on. So with the green candle, you open a long position and if you win, you then wait for a real red candle and go short.

The points of entry on October 30th

A new day, a new beginning with a small amount of \$2. Therefore, the capital for all orders will be reduced. Such behavior comes from the fear of losing too much and the will to keep the money.

Look at the three cycles on that day. The first cycle won in the first trade, the second in the second-order, and the third also in the second. The day ended up with a very small profit, not even 1% of the account, but well, the wins were fast and the capital small.

Remember the rule to trade up/down/up/down…

The points of entry on October 31st

The three cycles of that day were as follows: the first cycle won in the second trade, the second cycle won also in the second trade and the last cycle won in the first order.

A summary of the last three days of October at Olymp Trade

You can definitely say it was a victory, though, one can argue about the size of it. Apart from the day where 2 cycles won in the fourth trades, there were no big wins. Two last days brought a small profit of not even 1% on the account. But this is how the Martingale strategy works. Using it may be truly stressful but, on the other hand, may bring low earnings.

Greed and fear in action

It is a natural desire to want to earn a fortune. But then it is also a huge psychological burden to carry. I have checked that it is possible to raise the capital from \$320 up to \$1,000 within a week. But the thing is, that if someone is not used to operate big amounts, the fear of losing may be too big. Especially when you find yourself losing in the fourth trade and will need to gather the capital for the fifth round in the first cycle only. Plus, there’s no guarantee in trading, which means you can lose all your money if you’re not careful.

You see there are both, greed and fear involved. That is why you should be always prepared before you start. Get yourself a good trading plan and think carefully about the amount of money you are ready to invest. If you do so, you should have a higher chance of winning, although there are still going to be a lot of risks and factors involved.

I encourage you to tell us your story. You can use the comments section below. We are here for you.

Best of luck!

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Bart Bregman

Full time day trading, and helping out with Olymp Trade wiki in my spare time to create an awesome platform for beginners. I'm a digital nomad that travels the world while working from everywhere!

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