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This modern trading strategy is an amazing combination of simplicity and efficiency. Even if you don’t have special knowledge about financial markets, you will be able to master this strategy and apply it with great success. This trading method is based on the technical indicators MACD and Parabolic SAR. MACD consists of the two colored lines while Parabolic looks like blue dots on the chart. You don’t need to look for them on the Internet – they can be found in the technical analysis module, which you will find in the trading platform OLYMP TRADE. So, we are going to trade using these indicators. And we will use the Martingale system to cover possible losses: if we lose some money, then we will invest more into the next binary option. In the end, we will always get a profit. Most likely, you have heard about the Martingale system not exactly good things. It’s true, if you use this method in the wrong way, you will lose everything very quickly. However, in our case, we will have two technical indicators to help us in making decisions. This means that even if one or two trades will be losing, the next ones will be profitable.
So, what makes this strategy so effective?
Parabolic SAR Indicator
One of the indicators we are going to use in our “Good Martin” strategy is the Parabolic SAR. Open the technical analysis module on the OLYMP TRADE platform and select Parabolic SAR from the list of indicators. I will immediately appear on the chart as large blue dots. As you can see, Parabolic repeats the movement of the chart. If the price rises, the dots are placed under the candlesticks. And if it goes down, the dots appear above them. Knowing this feature of the indicator, you can easily determine the best moment to trade. For example, if the chart crosses the Parabolic dots from top to bottom, the trend is going to reverse, and you can trade “DOWN”. And the other way around – if the chart crosses the Parabolic dots from bottom to top, the price will rise.
You can install the MACD indicator using the OLYMP TRADE Technical Analysis module. MACD must be configured to work correctly. You should use the following settings: As you can see, MACD consists of two lines (blue and orange) and of columns (histograms). If the blue line bends downwards and crosses the orange one, it means that the trend is reversing and the price will go down (downtrend). This fact alone is quite enough to open a profitable trade “DOWN”. And if the blue line crosses the orange one from bottom to top, the price will go up (uptrend). In this case, you can trade “UP”.
Getting Ready to Trade
Before we start trading, we should select the time period of the chart. We want the candlesticks to show a price change for every 5 minutes. So, select this time frame. Now you are ready to track the signals.
Trade “UP”, if you see that:
- A Parabolic dot appears under the Japanese candlestick.
- The blue MACD line crosses the orange one under the histogram.
Trade “DOWN”, if you see that:
- A Parabolic dot appears above the Japanese candlestick.
- The blue MACD line crosses the orange one above the histogram.
As soon as you see one of these combinations, go to the OLYMP TRADE trading platform and open a trade for a period of 5 minutes. But don’t stop watching the indicators. For every Japanese candlestick you should make not more than one trade. When you see that the blue MACD line approaches the orange one, you should stop trading in this direction and watch the situation, waiting for the new clear signals.
Getting Rid of Losses
Even the strongest trend on the chart consists of both red and green Japanese candlesticks. It means that to avoid losses completely is impossible. So, what are we going to do? We will turn to the Martingale system for help.
Consider the following:
You invested 1 US dollar, but the trade was not a success and you lost this amount. Now to get profit you have to increase the rate of the next trade.
1 US dollar * 3 = 3 US dollars
Now, if you win, you will regain your lost money and even make some profit.
3 US dollars + 80% – 1 US dollar (loss from the previous trade) = 1.4 US dollars (net profit)
If your loss in the previous trade was $1, you will cover it with a profit from the second trade ($2.4). As a result, your net profit will be $ 1.4.
Below you will find the calculation of how much funds you will need to make profit if you make a few losing trade in a row:
1st trade – $1
2nd trade – $3
3rd trade – $6
4th trade – $14
5th trade – $33
6th trade – $78
Now you know how to use the “Good Martin” trading strategy. Follow the rules described above, and you will always make profit.
DISCLAIMER: Futures, stocks and options trading involves substantial risk of loss and is not suitable for every investor. The valuation of futures, stocks and options may fluctuate, and, as a result, clients may lose more than their original investment. The impact of seasonal and geopolitical events is already factored into market prices. The highly leveraged nature of futures trading means that small market movements will have a great impact on your trading account and this can work against you, leading to large losses or can work for you, leading to large gains.
If the market moves against you, you may sustain a total loss greater than the amount you deposited into your account. You are responsible for all the risks and financial resources you use and for the chosen trading system. You should not engage in trading unless you fully understand the nature of the transactions you are entering into and the extent of your exposure to loss. If you do not fully understand these risks you must seek independent advice from your financial advisor.