Moving Average "Three" Trading Strategy
Moving averages is a proven trending tool. They are the basis for many indicators, allowing you to find the optimal point to enter the market for binary options trading. In addition to well-known developments, there are also private solutions created by amateur traders. A large catalog of custom indicators is presented on the platform for theanalysis from TradingView. In this article we will look at the strategy using two tools - Triple Moving Average and a modified version of MACD.
Review of indicators and strategy
AK MACD BB INDICATOR - As you can see from the name, this tool is a kind of hybrid of two very popular indicators (MACD and Bollinger Bands). By looking at it, you can see that. In this article we are not going to deal with purely mathematical nuances of the calculation formula. In fact, this indicator is a MACD, which is plotted parallel to the Bollinger Wave. There is no histogram here, because not two, but one Moving Average in the form of a sequence of multiple points is used.
Three Moving Averages - is a combination of three moving averages, which is also quite obvious from the name. No innovative points can be discerned here. Therefore, one can only say about this indicator that the type of curves of the Moving Average are optimally combined in this combination. That's why this indicator has gained so much popularity among the TradingView users. It has received more than 7,000 likes, which is a very high value, placing TEMA in the top of the list of popular user tools.
Setting up a terminal for market analysis
Chart analysis of the market and trading in most cases is performed on different platforms. The functionality of the web-terminal for trading is limited, so the best solution is to use Live-graphics from TradingView. In the next tab of the browser the trading terminal opens options brokerThe trading system is fully prepared for the quick opening of a deal after the signal is received. The best way to trade is to PocketOption, there is support for a 5-minute time limit expirationsThe system requires you to use a reliable broker. We also recommend you a reliable broker Stars Binary (site).
Preparing to trade on the strategy - step by step:
- Open the trading terminal Poket Option (site) and select optimal asset - with the highest percentage of profitability. Any currency pairs are suitable, but not the crypto-index (CRYPTO IDX). Set the chart interval to 1 minute.
- In the next tab of the browser open the Live Chart TradingView (site). Choose the same asset and set a similar candlestick chart timeframe.
- We add two indicators by searching by name: "AK MACD BB INDICATOR" and "Three Moving Averages".
- Let's adjust Three Moving Average by halving the standard period - see picture below. The "Length" parameter value should be 25, "Length2" - 50, and "Length3" - 100. This will increase the sensitivity of the tool and allow it to be used on the one-minute timeframe.
For convenience, it is recommended to increase the standard thickness of the red and green curve, leaving the blue line unchanged. In this strategy, we only need these two curves, so they can be visually emphasized.
After entering the search query in the Add Indicators window a list of found options will appear. You should select "AK MACD BB V 1.00" and Triple Moving Average from the user with the nickname [AdventTrading]. It will be at the end of the indicator name.
Trading signals by strategy
The main indicator is the TEMA of three curved lines. When they cross, you should enter the market in the corresponding direction of the price movement. But before that it is necessary to get confirmation from the second instrument - AK MACD BB. If it confirms the price reversal, you can buy a contract to go up or down.
- Down signal - The red line crosses the green line and begins to build below it. The red MACD points fall below the wave with the blue fill, going beyond its lower boundary.
- A signal to go up - the green MACD points go beyond the upper boundary of the price channel with a blue fill, and the red TEMA curve rises above the green line.
A favorable sign is the presence of a divergence between the Moving Averages on the eve of their crossing. When the curves go long, almost merging into one line, it is a negative sign. It is not recommended to trade in such a time interval.
The expiration time of trading contracts for this strategy should be about 5 minutes +\- 1 candle. This variation is acceptable and does not play a significant role. At Binomo (bonus 100% to deposit by promo code REVIEWEEK100 - Activate) The actual duration of the trade depends on the point in time at which it was opened. When trading by either strategy, the following rules should always be followed money managementto limit yourself from financial risks.