Recently there have been many friends, especially 5 ones who inboxed and discussed with me about how to trade at Olymp Trade with CANDLESTICK OUT BAND. Through talking and watching pictures they captured when opening orders, I feel it’s wrong, too wrong. Thus, to fix those mistakes, I rewrite this article, exclusively for those who love the Bollinger Bands indicator.
Also in this article, I will extract one segment of my trade at Olymp Trade on the afternoon of April 24.
Remind some knowledge about CANDLESTICK OUT BAND
It is understood that 100% of a candlestick is outside of the Bollinger Bands indicator range. A candlestick like this is called the signal candlestick that indicates the preparation time to open orders = CANDLESTICK OUT BAND. Out upper band = open Down(bet the next candlestick red). Out lower band= open Up (bet the next candlestick green). For details, see this article: Olymp Trade trading strategy: Candlestick out Bollinger Bands.
This is a way of trade following the reverse trading style. Explanation: When the price is out of the upper band or the lower band, it may be a sign of trend development. Thus, opening a reverse orders is easy to lose.
Why are you capable of “burning your account” when trading with CANDLESTICK OUT BAND at Olymp Trade?
Answer: Habits + Psychology.
Specifically: The first few times you will feel very good and confident with this way of trade. But not always when the CANDLESTICK is OUT BAND, the price will go back.
Once the price has gone down, it may fall even more. The more you open UP => The more you lose money. Moreover, the way of reverse trading can make you lose your temper easily => Psychological problem => Opening consecutive orders aggressively and repeatedly opening reverse orders => BOOM!
How to trade with CANDLESTICK OUT BAND at Olymp Trade (Advanced)
Opening order skill
Let me read for you a small segment of the EUR/USD pair: (i) The price was on a downward trend, (ii) Break out from the hard support zone, (iii) The price fell sharply. In this segment, if you saw red candlestick OUT BAND and opened a reverse order (Increase = bet green candlestick), your account may be burned.
Or as this segment for example: (i) The price increased and broke out from the resistance zone, (ii) Created a Doji candle outside the band (iii) Continued to increase. If you have experiences, the CANDLESTICK OUT BAND in this is simply retested the last resistance zone. Opening the reverse order would be lose immediately.
If you like trading at Olymp Trade with the reverse style, add some extra signals such as CANDLESTICK OUT BAND but it was in the previous resistance or support zone. Or the candlestick which is outside the BAND is a special candlestick like Pin Bar, etc.
Improve emotional elements in trading
Olymp Trade is a game of emotions. As long as your emotions have problems, by default, sooner or later you will give all the money to Olymp Trade.
And in a method of reverse trading, you must be more stable in “controlling your emotions”. If CANDLESTICK OUT BAND appears, open orders. If lose, it’s normal. No need to follow it.
My experience: After winning a few times, withdraw money. Don’t put both the capital and interest too much in your Olymp Trade account.