The strategy differs from other trading systems in its simplicity and high efficiency. A trader does not need to use indicators, additional programs and complex analysis of price movements.
Trading is carried out using any candlestick chart. The whole essence of the system is based on the theory of probability and the martingale method, which is perceived by traders in two ways.
According to the mentioned theory, if you toss a coin a certain number of times and it comes up tails, then the probability of getting heads increases.
In trading, this theory is applied as follows:
For example, let's take a thirty-minute timeframe, the probability of a candle moving in the direction opposite to the previous movement increases if the movement consisted of three candles of the same direction.
The number of candles in one direction, according to statistics, never exceeded eleven.
The highest percentage of probability that the price chart will go in the opposite direction occurs after the appearance of the third candle, in some cases, after the appearance of the fifth and seventh.
- With a probability of fifty percent, the price chart reverses on the fourth candle.
- Twenty-five percent of the reversal of the movement falls on the fifth candle.
- The probability of ten, fifteen percent - a reversal on the sixth candle.
- The remaining ten percent is a reversal on the eighth, eleventh candle.
As you can see, this happens very rarely.
The strategy involves the purchase of an option after several unidirectional candles have appeared.
The size of the position should be small, about 2-3 percent of the total amount of funds.
The thing is that if the movement continues, we will increase the transaction according to the martingale system.
For calculation, by the way, you can use martingale calculator.
When asked why we trade this way, the answer is simple:
Three, formed in one direction, candles form an impulse with a large volume.
According to market rules, any volume must be adjusted. The market is never ready for rapid price changes. There are buyers and sellers all the time. They can't go anywhere.
One of the main rules of the strategy is that there is no trading 2 hours before the news. At this time, the market is not calm.
Speaking of martingale tactics, it is advised to use it no more than once.
Read also - Binary Options Indicator Strategy: Auto Levels
Here is an example of how this trading tactic works:
The screenshot shows that there were 4 signals (displayed as white squares, where 3 candles go in the same direction), and 5 purchases of options (yellow arrows) on martingale, the entry was only on 1 signal.
If, after doubling the position, there is no profit, do not double the position again. You need to wait for a new market signal and start from the position of the smallest volume.
Trading pairs: any major;
Working timeframe: the older the TM, the stronger the signal;
Expiration: 1 candle;
Time to trade: except for the release of strong news;
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