Are you a fan of online trading? In this guide, I will show you how to make money trading on the...
Are you a new trader in Olymp trade?
Have you been trying to make money trading but each time you stake real money you end up with a negative balance?
Here’s some relief for you. The simplest trading strategy for newbie traders. Ever tried it on your charts?
This strategy involves using moving averages to pick signals and the famous martingale strategy to manage and conserve trading capital.
Seems like something you want to try?
Let’s dive right in, shall we?
The Martingale Trading strategy based on Moving average crossovers.
The Martingale Trading strategy based on Moving average crossovers is most recommended to Olymp Trade Newbies.
This is a method of trading that involves increasing your trade size when you lose and halving your trade size when you win.
Moving average crossovers on the other hand is a strategy where two moving averages of different periods are used on a chart. If the smaller period moving average crosses the larger period moving average, the price is most likely to move in the direction of the crossover. Exponential Moving averages are most preferable because they refer to the most recent prices in their action.
(If for example, your candlestick time frame is 5 minutes, let your trade duration be 10-15 minutes)
Your chart is ready for trading.
You now need to begin executing trades as the strategy dictates to make money in Olymp Trade. How do you combine the Martingale Trading Strategy with Moving average crossovers then?
Just about to find out.
Focus on the Exponential Moving Averages. Observe how they move, how they behave, the directions they point towards.
They may either be pointing towards an upward direction or a downward direction. If the Exponential Moving Averages point upwards, they imply that the price is in an upward trend. If conversely, they point downwards, they imply that the price is in a downward trend.
Upward trends are associated with Buy signals while a downward trend with Sell signals. How to buy or sell profitably is now where the Martingale strategy comes in.
The reason we say that we need to buy if the EMAs point up and the crossover occurs upwards is simple.
The trend is upwards as hinted by the direction of the EMAs and it has also been confirmed by the upward crossover that the trend is actually upwards.
In that case, there are higher chances of the price going up in an uptrend than the prices going down. Even though there may be retracements here and there, the overall effect will be the rise of the price according to the trend.
The same thing applies if a downtrend is hinted by the EMAs and confirmed by a downward crossover. There are higher chances of the price continuing to fall in a downtrend that rising. Retracements will see defeat and the downtrend will be preserved.
Now you know when to Buy and When to sell, don’t you?
There is another dimension that you need to understand as a newbie. You may win trades yes. There is also the possibility of losing.
I know you didn’t see that coming, did you?
Realize that losing is part of the game just as winning is. Actually most traders lose all their profits in unsuccessful trades. As if that is not enough, unsuccessful trades continue to eat into their accounts until all capital is lost.
I would never wish such over any trader but success. In order to survive the unforgiving markets, pay attention to this.
Remember the opening sentence of this post, we said the martingale involves doubling your trade size if you lose and halving it if you win. It may at least conserve your capital if it won’t maximize your profitability.
This is how to incorporate your knowledge of when to buy/sell with how to buy/sell trading an asset with a return of 80% using an $80 account. Of course with the Martingale strategy at play.
What is the net effect on your account? You only lost $20 while gaining $32. This is a positive net effect of $12! This brings your account to $92.
This is a simple strategy to keep you going as a newbie on Olymp Trade. You don’t need complex strategies to begin trading.