Rsi And Stochastic Strategy Binary Options

Trading strategies can be based on more than ane indicator. This is the case of the Stochastic RSI strategy I am going to present to you today. It combines the Exponential Moving Average, the Relative Forcefulness Index and the Stochastic Oscillator.

Creating IQ Option template to trade the Stochastic RSI trading strategy

Can I use Stochastic and RSI together?

The Stochastic Oscillator and the Relative Strength Alphabetize are indicators included in the oscillator group. In many situations they follow a similar pattern on a cost nautical chart. So is there any indicate in using both at the same time? The answer is YES. But it has to be done in a smart way. Our strategy today uses not only oscillators but as well a trend filter, the EMA200. Oscillators are used in a not-standard mode, as you will see shortly.

Nautical chart grooming for the Stochastic RSI strategy

The first thing you should do is to become onto your IQ Option account, choose the financial instrument for the session and add the 3 indicators to your chart. To do that, click on the Chart analysis icon on the left side of the platform and find the MA, the RSI and the Stochastic.

Once they are all fastened, yous tin save your template past clicking the Salvage push underneath the three indicators displayed in the Chart analysis window. You can name the strategy in a way information technology will be easy to find it later. In the exemplary screenshot beneath it is only chosen EMA200+RSI+STOCH. My job is to remember that this template is for trading the Stochastic RSI strategy

For the needs of this strategy, the period of the Exponential Moving Boilerplate should be set at 200. The rest of the indicators should be left by default.

The EMA200 function is to filter the trend. Then y’all can open up long positions when the prices are above it, and brusk trades when the prices are below the EMA200.

The RSI serves to capture subconscious divergences.

And the Stochastic Oscillator volition give a point to enter the transaction subsequently you accept identified the trend with the EMA200 and have found divergences with the RSI.

Trading with the Stochastic RSI strategy

Outset, expect at the EMA200. If the prices run higher up it, yous tin start to look for divergences.

Observe the RSI indicator. Y’all are looking for the situation when the cost is forming higher lows only the RSI is creating lower lows at the same time. You can describe the lines so information technology is more visible. Take a look at the motion picture below. The toll is clearly rising while the RSI indicator line is falling. This is a hidden divergence, which allows you to trade pullbacks in direction of the main tendency.

The last step is to wait for the next crossover on the Stochastic indicator. When this happens, yous should enter a long position on the adjacent candle.

You should identify a end loss just beneath the nearest swing low. Identify a take profit at the level twice as big as risk defined by your stop loss.

The example beneath shows the USDCHF nautical chart where the opportunity to enter a brusk merchandise appears. The first matter you should wait at is the EMA200. If the prices are situated below it, the downtrend is identified and you tin can start looking for divergences. In club to practice that, analyse the highs on the price chart and in the RSI window. When you discover that the RSI line creates higher highs, check if the toll is making lower highs at the same time. If this is the case, wait for the cross down on the Stochastic. This will be a signal to enter a short merchandise.

Your stop loss should be set just above the nearest high. The target should be 2 times bigger than the risk.

Summary of the Stochastic RSI strategy

The Stochastic RSI strategy is quite simple in use nonetheless, very profitable. It requires you to add together three indicators to your chart and so watch them ane by one. Outset, identify the trend with the EMA200, then detect the hidden divergences with the RSI and finally, wait for the indicate from the Stochastic Oscillator crossover to enter the trade.

The nearly important step in today’southward strategy is to be able to recognise the hidden divergences.

The all-time identify to practice trading with the Stochastic RSI strategy is the IQ Choice demo business relationship. It is not only complimentary of charge but also supplied with virtual greenbacks that you can replenish any time you want. You get time to railroad train using the strategy without risking your money. One time you proceeds confidence in using information technology, you tin move to the live account.

Share your thoughts on the strategy that combines the EMA200, the RSI and the Stochastic Oscillator in the department comments beneath. I would exist happy to hear from yous.

Skillful luck!