Trading Strategy «Elder’s Force»
This strategy is based on EFI indicator, developed by Alexander Elder (Wikipedia). This is a well known trader born in Saint Petersburg and immigrated to USA. He is popular in the world society of traders mostly as an author of the bestseller «How to pay and win in the exchange». Also he developed his own trading concept, which main premises stated in the book. This review is about the efficient trading strategy based on the indicator «Elder’s force index» and MACD, working as an auxiliary signals filter.
For technical analysis you need to open the Live-chart of TradingView (go to the website). Unlike Binomo platform it allows to execute the professional technical analysis. The service is shareware, but all you need here are the basic tools. Well what do you need for trading with the strategy is:
- Open the currency on Binomo with the maximal profit margin (usually it’s EUR/USD);
- Add EFI indicator to the Live chart (Elder’s force index) and classic MACD;
- Set the time frame M1 (for turbo-options for 3-5 minutes), or M5 (for expiration 15-20 minutes).
You don’t need to change the indicators standard settings. You can add for convenience the colored indicator version to the chart – MACD Colors. This is up to you.
Signal to purchase «Down» option
EFI indicator shows the values of executed transactions along with the difference of the prices index for several periods. So it allows defining the current balance of «bulls» and «bears». Based on these data we can make high precise forecasts of the prices behavior in the nearest future. You shall buy «Down» binary option by combination of three factors:
- «Elder’s force index» line crossed the middle level or came very close to it;
- The quick moving average MACD crossed the slow one downwards;
- The lines of Moving Average MACD are above zero level (indicator bar histogram):
On the image above you can see the example of two signals within one hour and a half. The transaction shall be open right after the suitable conditions come, you don’t have to wait till the alarm candle stick closes.
Signal to purchase «Up» option
As in any other strategy the rules for the transactions opening for purchase are the same as the ones for sale, just in the mirror image. Thus the «Up» option shall be bought when three following factors come up:
- «Elder’s force index» line crossed the middle level upwards;
- The quick moving average MACD crossed the slow one upwards;
- The lines of Moving Average MACD are below histogram bars demonstrating the nascent trend:
On the image above you can see the example of the Live chart with two signals for opening the transaction «Down». Also 2 signals for opening the transaction «Up» sown above are discernible. Thus on a minute time frame transactions might be opened – all of them would close with profit, which proves the efficiency of the strategy. But everyone can monitor signals by historical data, much more hard is to do real trading with the strategy, but we will do it.
Example of trading with the strategy
The trade is executed on the pair AUD/USD with the time frame of 1 minute, expiration term – 5 minutes, investment – 10 dollars. The chart TradingView and Binomo terminal were opened. We spent around 10 minutes expecting the signal.
Well, on the Live chart we see the picture described above. The moving averages MACD crossed below the histogram level, and «Elder’s force index» bridged over zero level.
«Up» option was purchased for 10 dollars. But taking into account that there is the very strong overbalance of the indicator «Traders’s choice» (92% for rise in quotation and just 8% for decline) is seen, another similar transaction was opened, for the same sum. The total investment sum made $20, expected income is over $35.
Five minutes are gone. For the first 3 minutes there was the shot time correction to the opposite side, but the market took its toll – on the 4th and 5th minute the price kept growing, which allowed getting the planned profit. The net profit made $15,40.
Expiration rules and money management
The investments for one transaction shall be ideally less than 1% of the deposit. For this there shall be more than 100 dollars on the balance. But there shall be maximum 5% of the free assets invested, which lets you start trading just with $20.
Choosing the expiration terms you shall align with the interval set in the Live chart. The transaction duration shall be equal to circa 3-5 candle sticks. The minimal expiration period is 3 minutes, maximal – 1 hour (Binomo restriction (go to the website).