Whether you are interested in short-term trading or long-term investment, the “Fourth Extra” strategy can help you achieve your financial goals. Are you looking for an easy and understandable strategy suitable for both novice and experienced traders? Do you want to maximize your returns and minimize your risks? With its proven track record of success, this strategy is worth considering for anyone who wants to succeed in the electronic contracts market.
Firstly, let us talk about candles. Candlestick analysis was once a popular trend in financial markets, where traders started identifying patterns in the formation of groups of candles and used them in trading. It’s important to note that such strategies cannot guarantee 90% or even 80% accuracy on their own. However, when combined with additional methods such as Martingale and the observance of money management, they can bring stable profits.
More about Japanese Candlestick patterns
If you are a novice trader who is just starting to explore the world of finance, it is natural to wonder about the meaning of “candle” in trading; the term refers to a type of chart known as the Japanese candlestick chart, which visually represents the fluctuation of prices over a certain timeframe through rectangular shapes with lines at the top and bottom that resemble candles.
To effectively use the “Extra Fourth” strategy, it’s important to understand that red candles on a chart indicate a decline in price, while green candles indicate an increase in price; this color scheme is commonly used in trading platforms, including IQ Option. By keeping an eye on these colors and their patterns, traders can make informed decisions about buying or selling assets.
In addition to the red and green candles, there are also “doji” candles that are not colored and resemble a simple cross. While some trading systems are built around analyzing these “doji” figures, they are not relevant to the strategy being discussed here.
About the “Extra Fourth” Strategy
This trading system is based on a straightforward statistical observation, namely that after three consecutive candles of the same color, there tends to be a reversal in the fourth candle. Applying this principle to trading, the strategy recommends buying a CALL contract after three consecutive red candles appear on the chart, while a PUT option should be purchased after three consecutive green candles.
To implement this strategy, it’s crucial to match the expiration period with the chosen timeframe; for instance, if trading on the M1 chart, the transaction period should not exceed one minute. It’s also helpful to understand the Martingale principle, which involves increasing the volume of trades after unsuccessful ones to cover previous losses and minimize risks. However, it’s important to calculate the minimum trade volume to ensure the account can sustain 2-3 consecutive losing trades. Furthermore, this strategy is best applied to assets with minimal price fluctuations, such as currency pairs without the US dollar, euro, or pound.
In conclusion, the “Fourth Extra” strategy is a simple yet effective trading method that can be used in certain market conditions. However, it should not be solely relied upon for making trading decisions, and other factors such as market trends, economic news, and technical analysis should also be considered. Traders must also be aware of the associated risks and employ proper risk management techniques, such as the Martingale principle. By combining this strategy with other trading tools and approaches, traders can increase their chances of success in the dynamic world of financial markets.
NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
GENERAL RISK WARNING