Today, in this article, I will guide you to trade in Olymp Trade using Pullback candlesticks. This is a candlestick that is considered as a “magic candle” in a trend-following market. Follow the article to understand what the Pullback candle is and how Pullback trading works. You will also know the most effective strategy to trade in Olymp Trade with Pullback candlestick.
Register an Olymp Trade account NowGet $10,000 Free for beginners
What is a Pullback in trading?
In the world of trading, a pullback means an adjustment in a trend. A pullback market means a market that is under adjustment. This adjustment can happen in an uptrend or a downtrend. After such an adjustment, the price continues with its main trend.
For example, In an uptrend, after strong surges (aka waves), down adjustments will appear before creating new bullish waves. This is the pullback.
These bearish adjustments must ensure that the price does not create a new trough lower than the old one. If it is lower, the uptrend is likely to be broken.
What is a Pullback candle?
And so, when the price adjustments are wrapped up within a Japanese candlestick, they call that a Pullback candle. Usually, after the Pullback candlestick appears, the price will again create a strong wave following the main trend. I will illustrate this candle better with the pictures below for you to understand.
Zooming in the red squares in the image above, when price creates a Japanese candle, the shape of a pullback candle will be as shown below. It is very similar to a Pin Bar candle with a long tail and its head will follow the main trend.
Or as in a downtrend, if a bullish adjustment appears before a new bearish wave within a Japanese candle, we also have a pullback candle in a downtrend with the tail up and the head down.
The position of Pullback candles in a trend
Usually, a pullback candle appears right after the price breaks out of the resistance/support to create a trend. The price will adjust once to confirm that it will enter a trend in the future.
For example, in the case below, right after the price breaks out of the support to go down, it will adjust one time and create a pullback candlestick in a downtrend.
An effective Olymp Trade trading strategy using pullback candlesticks
You may understand what pullback candles are. Now, I will show you how to trade with this special candlestick. As mentioned above, the price after the adjustment will continue to develop strongly according to the newly created trend. This is when we can consider opening an order following the trend.
An effective Olymp Trade trading strategy using pullback candlesticks combined with support/resistance
How to open an order is as follows:
+ Open an UP order when the price creates a pullback candlestick with the tail touching the resistance just broken.
+ Open a DOWN order when the price creates a pullback candlestick with the tail touching the support just broken.
Capital management and trading principles
Capital management is vital to your Olymp Trade trading strategy. No matter how effective your strategy, but with poor capital management, you will not be able to gain any profit.
With this pullback strategy to trade in Olymp Trade, you can open orders with the Classic capital management method. That means keeping the same investment for each order.
For example, If you deposit $100 into Olymp Trade, you will divide it into 10 trades with $10 each.
Because this is a strategy that takes a lot of time to wait for entry points, the above method of capital management is perfectly reasonable for your account.
Principles of opening orders in Olymp Trade with Pullback candlesticks
There are a few principles you need to keep in mind if you don’t want to lose money with this strategy.
+ Do not open many orders when a pullback candle appears. That means when the conditions are met, you can only open one order. Every transaction in Olymp Trade involves the risk of loss. So, absolutely adhere to this principle.
+ Do not open an order against the trend of pullback candles. This means that when the price breaks out of the support and goes down creating a pullback candle, you can only open a DOWN order. When the price breaks the resistance creating an upward pullback candlestick, you can only open up orders.
+ Do not change the investment amount for each transaction using pullback candles. If you stuff orders or use the Martingale capital management method, your account will possibly evaporate after the first few trades. Please keep this in mind.
Some test orders on real accounts using the Olymp Trade strategy with Pullback candles
Here are some test orders I opened using the Olymp Trade strategy with pullback candles. In general, this strategy is safe for your account. What you need to do is to wait until the pullback candlestick appears after the price breaks out of the levels. When this happens, open an order.
1st order: The market created a downtrend when the price broke out of the support and went down. Right after the breakout, the price created a pullback candlestick with a long tail pointing up. Opened a DOWN order with an expiration time of 15 minutes. I won.
2nd order: It was the same as the 1st order. Once again, I opened a DOWN order right after the pullback candle was completed. As a result, the price dropped sharply after that.
Summary of Olymp Trade trading strategy with Pullback candles
This is an article to guide you to trade in Olymp Trade effectively with pullback candles made by me – Mr.Joker. Test this strategy for at least 2 weeks on a DEMO account to verify its effectiveness. In the next article, I will review this strategy with real profitable transactions on real accounts. Let’s follow it up. Goodbye and wish you a successful transaction.
Register an Olymp Trade account NowGet $10,000 Free for beginners
The post Olymp Trade Trading Strategy With Pullback Candle And Resistance/Support appeared first on How To Trade Blog.
source https://howtotradeblog.com/olymp-trade-pullback-trading-strategy/
No comments:
Post a Comment