Trading strategies can help you in turning into a successful trader. You only have to know how and when to use them. Today, I will present a strategy that will give you a hint about the trend reversal and the best points to open a trading position. It will rely on three different indicators. Together, they will provide pretty valuable signals.
Setting up the chart
To be able to access the indicators’ list, you have to be logged in to your IQ Option trading account. You will also need to decide what kind of asset you want to trade. For this strategy, it is best to choose from major currency pairs. Choose the Japanese candlesticks chart type, so the strategy I am describing will be clearly visible. With these things sorted out, you are ready to create a template for the trio strategy.
You must click on the indicators icon which you will find on the left side of the IQ Option platform. All the indicators needed for our strategy are under the indicators tab. When you know what you are looking for, you may simply start writing the name of the tool in the search window and the suggestions will be displayed.
As I have already mentioned, the strategy we are talking about today is built upon three indicators. They all fall within the oscillators group and they are the Relative Strength Index, the Commodity Channel Index and the Williams %R. You will need to add one after one. You can adjust the colours, thickness of the lines and periods. For the CCI, change the period to 20.
I have good news for you. You will not have to repeat all these again. On the IQ Option platform, there is this wonderful possibility to save the template you have created. By doing this, you save yourself precious minutes next time you would like to use the trio strategy.
In order to add the strategy to the saved templates, feel free to use our short guide about managing reusable templates on IQ Option.
How to use the strategy of three on the IQ Option platform
The RSI, CCI and Williams %R should be visible under your price chart, one underneath the other. Your job now is to watch them carefully and await the favourable situation to occur. And what is the favourable situation in this case?
Opening long transactions with the strategy of three
There are three conditions you are expecting to happen.
- There are two horizontal lines drawn on the RSI oscillator window. Their values are 30 and 70. The RSI line should cross the 30 line from below.
- On the Williams %R window, you will see a few horizontal lines. The indicator should cross the -80 line from below and continue upwards.
- The CCI line supposed to cut the -100 line from beneath.
So all three oscillators should cross lower lines on the way up. A signal is very strong when all the three conditions are met. However, it is sufficient for a strategy to work when only two indicators are confirming the entry point.
Opening short transactions with the strategy of three
You can open a short position when only two indicators are giving signals to do so. Naturally, three are better, but it will not happen every time that all three confirm the trend reversal. In order to open a short transaction the lines of the oscillators should move downwards from higher parts.
- The RSI should cross the 70 line from the top.
- Williams %R cuts the -20 line from above.
- The CCI should cross the 100 line from the top and continue downward.
The strategy that combines the RSI, Williams %R and the CCI predicts the reversal of the trend. There are three oscillators in this strategy, although it is enough when you receive a signal just from two of them.
The signals obtained thanks to the trio strategy are pretty strong and reliable.
It is a good idea to use this strategy on the markets with high payout rates such as major currency pairs.
The duration of your transactions depends on the period of the candles you are using. It should be the same as your chart’s timeframe, in our opinion, 5 minute works the best, but you can also try a different period. Adjust it accordingly.
Remember, there is an IQ Option practice account where you can implement every new strategy you have read about. You get virtual cash there so you have the possibility of opening risk-free trades. Practice as long as you need and switch to the real account when you are ready.
We are sorry that this post was not useful for you!
Let us improve this post!
Tell us how we can improve this post?
Download this article as PDF. (English)Enter your Email Address