Engaging in electronic contract trading offers an exhilarating and profitable venture. Your primary task is to predict the price’s direction for the upcoming periods and acquire the corresponding option.
Nevertheless, there are instances where your trade might seem promising, yet the market takes a swift turn before the expiration, resulting in a sizable reversal candle. This often occurs when you enter a trade toward the end of the current surge or during a trend reversal.
On the flip side, there exist traders who exhibit surgical precision, initiating their positions right at the inception of an impulse movement, and confidently reaping their well-earned profits.
So, what’s their secret? It begins with a tried-and-true, dependable trading system. The article introduces the “Three in One” trading strategy, which not only helps you discern the current movement’s direction but also gauges its potential, providing valuable insights for your trading success.
Description of the strategy
This trading system is structured around three key indicators: Stochastic, RSI, and SMA (Simple Moving Average). The good news is that these essential tools come pre-installed in the Pocket Option broker trading platform.
To gauge the current movement’s potential and determine if it’s approaching its conclusion, we’ll utilize two widely recognized oscillators, aided by their overbought and oversold zones. Specifically, for the Stochastic oscillator, we’ll consider the range of 0-20 and 80-100, while for RSI, we’ll focus on the 0-30 and 70-100 ranges. Additionally, RSI incorporates a pivotal level of 50, signifying the strength of the ongoing movement.
The Moving Averages in this strategy assume the role of signal indicators. In this context, two Moving Averages are involved, and the crux of decision-making hinges on their intersection.
Setting up your workspace
In the “Three in One” strategy, consider the following key points.
As for asset selection, opt for an asset with medium to high volatility. This strategy performs poorly on charts that predominantly remain flat. Ideal choices include currency pairs or cryptocurrencies. You can select a timeframe spanning from 60 seconds to 15 minutes. This choice depends on your trading style and how frequently you’re willing to make contract purchase decisions.
Employ Japanese candlesticks or bar charts for analysis.
Indicator Settings:
- RSI: Use the default settings with a period of 14.
- Stochastic: Configure the parameters as 5; 5; 3.
- Moving Averages: Assign a period of 10 for the first MA and 5 for the second.
Consider using distinct colors for the moving averages for enhanced clarity.
Trading using the “Three in One” strategy
Despite incorporating several indicators, the system remains remarkably straightforward and intuitive.
To initiate a CALL option, look for these specific conditions:
- Stochastic emerges from oversold conditions and is trending upward.
- RSI surpasses the 50 level but has not yet reached 70.
- The 5-period MA crosses the 10-period MA in an upward direction.
Conversely, for a PUT option, you should consider the following conditions:
- Stochastic moves out of overbought territory and trends downward.
- RSI falls below the 50 level but hasn’t reached the 30 level.
- The 5-period MA crosses the 10-period MA in a downward direction.
The expiration period is set equal to the time of formation of three bars.
When determining your trading course, the foremost signal is the crossover of the moving averages. This marks a significant turning point. Once this crossover has transpired, it’s vital to corroborate with the oscillators to gauge the movement’s potential.
Historical data suggests that this strategy boasts an impressive success rate, with a profit generated in over 90% of transactions. However, to secure a successful contract purchase, it’s imperative that all the conditions outlined above align seamlessly.
In conclusion, the “Three in One” strategy, with its systematic approach and focus on the interplay between moving averages and oscillators, holds promise for traders seeking reliable outcomes. While it doesn’t guarantee flawless results, it presents a well-structured framework for enhancing your binary options trading endeavors.
