This modern trading strategy is an amazing combination of simplicity and efficiency. Anyone who does not even have special knowledge in the field of financial markets will be able to quickly master it and apply it successfully.
The trading method is based on MACD and Parabolic SAR technical indicators. Such complex names but these are just two colored lines (MACD) and blue dots (Parabolic). You do not need to find them on the Internet or download somewhere they are already in the technical analysis module, which you can find in the OLYMP TRADE trading platform.
On signals that give these indicators, we will trade. And martingale system will insure us against possible losses: if the transaction goes into red, then the next time trading we’ll put more money on. In the end, we will definitely stay in the black. Likely, many have heard not good things about martingale system. In truth, this method can very quickly drain you of all money in the account if using incorrectly. However, in the case of our strategy, the decision to open a trade will be confirmed by two technical indicators. This means that even if one or two transactions in the selected direction will be unprofitable, the following will bring profit with a probability close to 100%. Let’s find out why this strategy is so effective, and what elements it consists of.
Parabolic SAR indicator
Well, one of the indicators that gives a signal to start trading on the strategy “Good Martin” is Parabolic SAR. To get to know it better, open the technical analysis module on the OLYMP TRADE platform, select Parabolic SAR from the list of indicators, and it will immediately appear on the chart as large blue dots. As you can see, in general, Parabolic completely repeats the direction of the chart. If the price rises the points will under the candles and if it falls points will above them.
Knowing this feature of the indicator, you can easily determine the moments at which it is most profitable to open a deal. For example, if the chart crosses the Parabolic points from top to bottom, it means that the trend will unfold, and you can open trades for a fall. Conversely, when the chart crosses the Parabolic points from the bottom up, it means that the price will rise in the future.
The second indicator, MACD, can be installed on the chart in the same way as Parabolic, in the technical analysis module on the OLYMP TRADE platform.
In order for MACD to work correctly, it must be configured.
Enter the following data in the form:
As you can see, MACD consists of two lines (blue and orange) and bars — histogram. If the blue line bends from top to bottom and crosses the orange line, it is a signal that the trend reverses and the chart will go down (downtrend). This is even enough to open a profitable trade on the UP Fixed Time Trading. And if the blue line crosses the orange line from below, this indicates that the chart will go up (uptrend), and you can open a deal DOWN.
Getting ready to make a deal
Before you start trading on our strategy, set the time interval of the chart.
It is necessary that the candlesticks show the price change for every 5 minutes. So choose the period of 5 minutes. Now you are ready to track the signal to open a Fixed Time Trading.
Open a trade ABOVE if you see that:
- – Under the Japanese candlesticks appeared one point Parabolic
- – The blue and orange lines MACD crossed under the feature of the histogram
Open a trade BELOW if you see that:
- – There is one Parabolic point about Japanese candlesticks
- – The blue and orange MACD lines intersect above the histogram line
When one of these combinations formed go to OLYMP TRADE and open a deal for a period of 5 minutes, in the appropriate direction.
Do not stop monitoring over the indicators. Thus, one of your trades will correspond to one candlestick.
When you see the blue line MACD begins to approach the orange, trading in this direction should be suspended, and watch the situation, waiting for new clear signals.
Get rid of losses
It is obvious that even a strong trend on the chart consists of both red and green candlesticks. It turns out that the price can rise or fall in some 5 minutes. In the case of Fixed Time Trading, this means that losing trades cannot be avoided. What can we do?
Here we can use the martingale system, which will help to cover losses and remain always in the black.
Let’s give an example:
You made a deal for $ 1, but it was unprofitable, and you lost the
entire amount. To cover the loss and make a profit, you need to increase the
rate of the subsequent transaction.
1 USD * 3 times = 3 USD
Now, if you get income, you will cover the loss of the previous transaction, and even remain in the black.
US $ 3 (rate) + 80% (percentage earnings) – US $ 1 (loss from previous trade) = US $ 1.4 (net profit)
Let’s calculate: there was a loss of $ 1, but you covered it by making a profit from the second transaction of $ 2.4. As a result, your net profit was $ 1.4 on top.
Below you can see a calculation of what amount is needed to stay in the black with any number of losing trades in a row:
- 1st transaction – $1
- 2nd transaction – $ 3
- 3rd transaction – $ 6
- 4th deal – $ 14
- 5th transaction – $ 33
- 6th transaction- $78
Now you know the trading strategy “Good Martin”. Keep rules described in this article and you will get profit.