Make Money with Japanese Candlesticks Trading Strategy on Olymp Trade

Make Money with Japanese Candlesticks Trading Strategy on Olymp Trade


Japanese Candlesticks on OlympTrade

Make Money with Japanese Candlesticks Trading Strategy on Olymp Trade
Candlestick analysis allows you to understand and predict the market situation without the use of trading indicators. Trading using Japanese candlestick involves the search for particular candlestick chart patterns that help to predict price changes. The models of candlesticks gained their popularity due to their informative, simple presentation of the situation on the market trades and high accuracy of signals.


How do you read candlestick signals?

One or several candlesticks on the chart regularly form combinations that help traders decide to open or close a trade. These combinations are called “patterns”.

Candlestick patterns are divided into models that point to trend reversal and models that point to trend continuation. All one needs to do is to wait for a certain model to appear on the screen and make a trade based on the corresponding prediction.
 

How do you trade using single candlestick patterns?

Some Japanese candlestick models consist of a single candlestick. In these models, the shape and color of the candlestick indicate a reversal or continuation of a trend.

To get the clearest signals, analyze single candlestick patterns for longer time frames – one hour or longer. To confirm signals, additionally analyze other patterns discussed below.


Hammer

Make Money with Japanese Candlesticks Trading Strategy on Olymp Trade
The Hammer pattern is a trend reversal indicator.

Visually, this candlestick looks like a hammer with a small body of any color and a long lower shadow. There is practically no upper shadow. At the same time, the lower shadow is usually twice as long as the body.

In such a situation, open an Up trade if the price fell before this, and open a Down trade if the price rose before this.
 


Shooting Star

Make Money with Japanese Candlesticks Trading Strategy on Olymp Trade
The Shooting Star pattern is a trend reversal indicator.

Visually, this candlestick looks like an inverted hammer, with a small body of any color and a long upper shadow. There is practically no lower shadow. At the same time, the upper shadow is usually more than twice as long as the real body.

In such a situation, open an Up trade if the price fell before this, and open a Down trade if the price rose before this.
 

Doji

Make Money with Japanese Candlesticks Trading Strategy on Olymp Trade
Doji is an indicator of closing due to indecision in the market. It usually appears when the supply and demand in the market are at an equilibrium.

Doji looks like a cross: the opening price is virtually equal to the closing price, and both shadows are long.

In this scenario, the decision about the trade should be made in the context of the previous price behavior.


How to trade using 2 candlesticks patterns

You can often find candlestick patterns consisting of one green and one red candle on a chart. They are close to each other in a certain way and give a signal that you need to open an up trade or a down trade.

The advantage of such models is that they give leading signals. The accuracy of signals increases when the market clearly shows an upward or downward trend.


Bullish Engulfing

Make Money with Japanese Candlesticks Trading Strategy on Olymp Trade
Bullish Engulfing is a combination where the boundaries of the body of a green candle are larger than the boundaries of the body of a red one. The green candle follows the red one and completely engulfs it. This means that the price of the asset has risen more than it has fallen before.

As a rule, this pattern gives a signal about the end of the downtrend and the beginning of the uptrend.


Bearish Engulfing

Make Money with Japanese Candlesticks Trading Strategy on Olymp Trade
Bearish Engulfing is a combination where the boundaries of the red candle body are larger than the boundaries of the green candle body. The red candle follows the green one and completely covers it. This means that the price of the asset fell more than it had grown before.

As a rule, this pattern gives a signal about the end of an uptrend and the beginning of a downtrend.


Piercing Pattern

Make Money with Japanese Candlesticks Trading Strategy on Olymp Trade
A Piercing Pattern is a combination where the body of a green candle starts below the body of a red candle. The green candle follows the red one, while the closing price of the green candle is in the area of the upper part of the red candle body.

As a rule, this pattern gives a signal about the beginning of an uptrend. A Piercing Pattern works similarly to Bullish Engulfing, but it is not as strong. To confirm the signal, analyze other patterns as well.

Dark Cloud Cover

Make Money with Japanese Candlesticks Trading Strategy on Olymp Trade
Dark Cloud Cover is a combination where the body of the red candle starts below the body of the green candle. The red candle follows the green one, while the closing price of the red candle is in the area of the lower part of the green candle body.

As a rule, this pattern gives a signal about the beginning of a downtrend. Dark Cloud Cover works similarly to Bearish Engulfing, but it is not as strong. To confirm the signal, analyze other patterns as well.


Bullish Harami

Make Money with Japanese Candlesticks Trading Strategy on Olymp Trade
Bullish harami is a combination where a long red candle is followed by a shorter green candle. In this case, the body of the green candle does not exceed the boundaries of the red body.

As a rule, this pattern gives a signal about the beginning of an uptrend. To determine the trend more accurately, analyze the pattern together with a support line.


Bearish Harami

Make Money with Japanese Candlesticks Trading Strategy on Olymp Trade
Bearish harami is a combination where a long green candle is followed by a shorter red candle. In this case, the body of the red candle does not exceed the body boundaries of the green candle.

As a rule, this pattern gives a signal about the beginning of a downtrend. To determine the trend more accurately, analyze the pattern together with the resistance line.


Set Up Japanese Candlesticks

To begin with, Japanese Standard is profitable trading method which you can use on OlympTrade. Strategy itself is based on japanese candlesticks which trader must identify in order to make a right prediction of a graph move.
Make Money with Japanese Candlesticks Trading Strategy on Olymp Trade
Most importantly, this strategy does not need any complicated indicators. What is more, it works with any asset you like. The only thing you will need to do is change the chart type to Japanese candles. You can find this menu next to “Indicators” menu on the top left side of a trading page.
Make Money with Japanese Candlesticks Trading Strategy on Olymp Trade
The next step is changing the time trade and entering the bet amount. The Japanese Standard strategy works best in 10 minutes time trade. You will be able to change the time on the top right side of a trading page.
Make Money with Japanese Candlesticks Trading Strategy on Olymp Trade
Nevertheless, you will also need to choose 5 minutes time period. You can find this menu at the bottom of a trading page.


Principle of Japanese Candlesticks

Make Money with Japanese Candlesticks Trading Strategy on Olymp Trade
Finally, how the strategy works? Now we are seeing the Buy option, and you will need to “BUY” when Green candle goes higher than the previous Red candle. The Sell option will be when Red candle goes lower than previous Green candle. Respectively, in this case you will need to “SELL”.


Profit From Trading using Japanese Candlesticks

Make Money with Japanese Candlesticks Trading Strategy on Olymp Trade
Now just wait for ten minutes and take your profit. To sum up, the strategy itself is not complicated at all and can bring you a big amount of money. Above all, this trading method is suitable not only for beginners, but for professional traders as well.
Thank you for rating.
REPLY A COMMENT Cancel Reply
Please enter your name!
Please enter a correct email address!
Please enter your comment!
The g-recaptcha field is required!

Leave A Comment

Please enter your name!
Please enter a correct email address!
Please enter your comment!
The g-recaptcha field is required!