by ff | Published
The simplest strategy for beginners, but also useful for more experts
Trading entry signal on Exnova , IQ Option , Pocket Option , Close Option or others in our Best Brokers Comparison
Introduction
This strategy is based on the simultaneous observation of three indicators, pair of moving averages, RSI and Stochastic.
The trade opening signal occurs based on the confirmation of these 3 indicators.
It is therefore a strategy that does not require particular knowledge, just follow these instructions. It is one of the easiest strategies and suitable for everyone, even the less experienced.
Trading tools
The moving average indicator represents the average of the values of the last candles. Mobile because it changes over time as new candles appear.
The price moving from one side of a moving average to another can indicate a change in trend.
We will use two moving averages to have better information, also knowing that the crossing of the averages gives greater probability of a change in trend.
As a signal filter we rely on two of the most popular indicators, RSI and Stochastic.
In the RSI indicator (Relative Strength Index) we refer to the center line. Candlesticks often have difficulty crossing this line, which if crossed represents a confirmation of the trend direction.
Stochastics gives us a trading signal when the lines leave one of the outer zones and the lines cross.
The confirmation of these three elements therefore gives us a signal of opening of the operation.
We use a one minute candlestick chart with 5 minute expiry.
This expiry was chosen foreseeing possible price retracements.
Trading platform
The strategy applies to any market and any broker.
In our tests and examples we used the Pocket Option broker.
If you don’t already have it, here is the universal link valid for all countries:
Graphics tools
- Moving Average indicator period 5
- Moving Average indicator period 10
- RSI indicator standard parameters, with central line only.
- Stochastic indicator standard parameters
- 1 minute candles and 5 minute expiration
Chart preparation
To get started let’s open the chart platform and install the indicators.
If you don’t remember exactly how to do it, here’s a quick tutorial on how to get started.
We install the indicators provided by the strategy with the recommended parameters and customized colors and windows of your choice.
How to open a trade
Obtaining the signal is very simple, with 3 conditions that must be verified simultaneously:
- Crossing of the two moving averages
- RSI which crossed the zero line, passing from one zone to another
- Crossing of the Stochastic lines occurred, after they exit one of the external zones
The examples make it clearer.
CALL input
PUT input
Observations and advice
- The RSI center line acts as an obstacle. Make sure the overshoot is confirmed without bounce.
- Do not open positions when the bands are tight.
- The strategy is valid for any time frame. It works well respecting the proportions, for example even with 5 minute candles and 20/30 minute expiry, but more patience is needed to wait for the signals.
- Avoid low volatility markets (small candles that barely move). Trade when the market is buoyant.
- We do not operate during lateral market phases.
- If you miss a couple of consecutive trades, stop and analyze, something is wrong with your operations.
- Start with the demo, then with a minimum amount, just to test the market and see if everything is calm. Raise the stakes gradually.
- Do not invest more than 5% of your capital in a single trade. 1% or 2% is a reasonable choice.
Conclusion
Watch and review the video examples with tutorials on YouTube to understand the rules well.
Remember to click like on the YouTube video, and subscribe for any updates.
Furthermore, your comment in the description of the video is useful.
Thank you and Happy Trading!
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