Trading Strategy by Indicators from LazyBear
An advantage Live graphics from TradingView is the ability to create your own indicators and scripts. Many thousands of users have taken advantage of this. Created solutions get to the catalog of custom indicators. The best developments are at the top of the list. The more likes from other traders, the higher positions.
One of the leaders among the developers is the user with the nickname "LazyBear". He has created more than a dozen very effective indicators for technical analysis. On their basis you can build effective strategies for binary options. In this article we will look at the scheme of To trade by the signals the combined system of two indicators.
A brief overview of the tools and strategy used
Two indicators are used - "Weis Wave Volume" and "Variable Moving Average". However, these are not standard solutions, but their custom modification, distinguished by a slightly modified calculation formula. To understand the principles of the strategy, a brief overview of both tools should be made.
Indicator: Weis Wave Volume [LazyBear]. This is a volume indicator, which shows the intensity of trading on the market in a particular time interval. This indicator allows to estimate not only the current situation, but also to forecast its further development over time. The market participants' behavior largely determines the price movements. The higher is the traders activity, the higher is the volatility. As soon as the number of trades starts to fall, the volatility level also falls, i.e. the market turns into a low-income market. flat state or horizontal trend.
The indicator consists of a bar graph. The elements are colored in two colors - green and red. The interpretation of color signals is standard. Green - positive price trend of growth, red - strength of downward movement of the market. The key signal is the color change point. It is of particular importance in a situation where the market reversal was preceded by a volatility peak. It is shown on the histogram by the large height of the bars.
Variable Moving Average [LazyBear]. This is a modified version of the classic VMA. It differs primarily in the presence of color indication. However, it does not play a principal role in this strategy. The main signal is, as with all MAs, the crossing of the curve with the price on the chart.
Presets for trading
TradingView is a platform for market analysis, but not for trading. Therefore, in order to trade you will need to open a web terminal of some company in the second tab of your browser. We recommend using PocketOption broker or another option from Top binary brokers of our website.
- open a trading terminal (Pocket Option terminal) for trading and Live charting (tradingview.com) for tehanalysis;
- in both tabs set the same asset and candlestick chart interval (1 minute);
- add the "Variable Moving Average [LazyBear]" and "Indicator: Weis Wave Volume [LazyBear]" indicators to the Live Chart.
Next, open the WWV settings, go to the "Style" tab and select the "Columns" type of graphical display. This will not affect the functionality, but will facilitate the visual perception of signals. You will also need to change the Variable Moving Average settings: the "VMA Length" parameter value should be reduced to 3 in the "Arguments" tab.
The strategy is based on a combined signal from the two indicators. First, candlestick formations should break the VMA_LB curve, and second, WWV_LB should also signal a change in trend direction.
- Down signal - the penetration of the red candle curve VMA_LB, as well as the change of color of the bar on the WWV_LB from green to red.
- A signal to go up - the penetration of the VMA curve of the green rising candle, as well as a similar signal of a change in trend on the volume indicator. However, in this case, the color of the histogram must change from red to green.
The expiry time of the transaction should be equal to 3-4 minutes. On the pocketoption.com platform you should choose the penultimate option (out of 5 available) for the expiry time of the turbo contracts.
An important nuance should be noted. Entering the market should be carried out in conditions of a reversal of strongly pronounced price trends with high trading volume and high volatility. Therefore, if on the eve of a trend reversal the bar height was less than 1,000, it is not recommended to open a deal. The reversal of weak trends in most cases is not so pronounced and lasts for a short time. In fact, it is a short-term correction of the main price movement, rather than a trend reversal. For convenience, you can add a horizontal line by manually specifying the value of thousand in the settings.