This is the trading method at Olymp Trade drawn from T.L.S (Trend, Level, Signal). The way to trade is verified, which has a high probability of winning and is very safe. In this article, I will show you how to trade Options with the method called “Test Candlestick”.
- 1 How to trade Options with “Test candlestick”
- 2 Detailed review of entry points using the method “Test candlestick” at Olymp Trade
- 3 A few notes for how to trade at Olymp Trade with test candlestick
How to trade Options with “Test candlestick”
When the price breaks through the Support/Resistance levels to develop into a new trend, it usually bounces back to test the levels it just broke. And this will be where we open options.
Open options according to the candlestick’s color
5-minute Japanese candlestick chart corresponds to the 5-minute expiration time of an option. And only open options when the timer counts down to 00:00 (starting the next candlestick).
It means that this method will have a signal candlestick, and we will focus on betting the next candlestick green or red (Green = Up and Red = Down).
How to identify the signal candlestick in the method of trading options with “Test candlestick”
For example, the price breaks a strong resistance => an uptrend may form. After just breaking the resistance, the market creates a candlestick to retest the resistance (the role of resistance now becomes support) => Focus on opening an Up option (bet green for the next candlestick). When the “Test candlestick” closes is the time we open options.
On the contrary: The price breaks the support zone => a downtrend may form. The market creates a candle to retest the support zone the price just broke => Focus on opening a Down option (bet the next candlestick red). Opening time is right after the “Test candlestick” closes.
Don’t care about the color of the test candlestick. You just need to know one thing. When the price turns back to test the support or resistance level it just passed, it’s the time you are about to open options. Thus, focus on the next candle. The next part I will give more specific examples of this way of trade.
How to manage when trading options with this method
There are two ways to manage capital appropriately:
(i) Use the same amount of money for every option: Open $10 per option until the trend is over.
(ii) Reduce capital gradually: When the price starts the trend (just breaks the Resistance/Support), the test point will be the safest. With a high probability of winning in the beginning, we can use a high amount of money. Later, the market will be more difficult to grasp, which means we should gradually reduce the amount of money through each option.
Manage emotions when trading at Olymp Trade
This method requires you to be patient and willing to ignore the opportunity. The market will always be repeated (going up and down). If it’s not today, then tomorrow. Sooner or later, it must form an uptrend or downtrend. Your job is to wait and confirm the market has entered the trend. At that time, focus on the test candlestick.
Absolutely comply with the rules you set. If you have chosen Support/Resistance and trend as a guideline to open optión, do not care about RSI, Bands or Stochastic, etc. Because when the market enters the trend, indicators sometimes give you reversal signals. This is the most taboo thing when trading options. Opening consecutive reversal options = your account is exploded.
After an option is opened, if you lose, just let it be. Absolutely not increase money or open consecutive options.
Detailed review of entry points using the method “Test candlestick” at Olymp Trade
7 options: win 6 – lose 1. Uptrend = only open Up options. Only open options at points where the price creates test candlestick at the levels (Support/Resistance) it just passed.
Option (1), (2), (3) and (4): Win. The prices went up and surpassed the resistance levels. Then it created candlestick to test the resistance zones it has just passed. Test candlestick = signal candlestick (prepare to open options). As long as this test candlestick is still in the test level (resistance zone), you can bet the next candlestick green right after that.
Option (5), (6) win and option (7) lose. Option (7) is an uncertain entry point, I should use the risk-free transactions.
A few notes for how to trade at Olymp Trade with test candlestick
- Patience: Agree that the price has signs of retesting, even a deep test. But you should wait for the market to close the signal candlestick before deciding. Avoid the risk that the price only goes up temporarily then quickly falls back.
- If not sure, skip it. It is better to keep the money because the opportunities are a lot. This is the trading method following the candlestick’s colors (Up = bet the candlestick green, Down = bet the candlestick red). You can only open options when the signals candlestick has just closed. That means you only have about 2 seconds (even less) to decide whether to click on the button or not. So, if the feeling is uncertain, ignore it and wait for the next point.
- Trend: You may think that the market rarely tends to be as beautiful and long as August 5. No, it will always be the same, repeat again and again. The problem is that when it repeats, you have money to trade or not. So, if you like this method and build strategies around the trend, support/resistance and test candlestick, then you just need to browse the market or currency pairs. If there is a clear trend, sit and wait for the entry points to open options.
This way of trade will be verified further over time. Olymp Trade Club will continue to use this method to give you a general probability of winning/losing.