The Strategy For Scalping «Kolibri»
If you want to quickly enlarge your trading deposit, the best solution would be the use of a scalp mode. If you prefer dynamic trading, you’re welcome to take advantage of a trading system dubbed «Kolibri» due to which you can get up to 300% of the capital gain for one week. It works on all foreign exchange assets and it’s suitable even for inexperienced traders.
The principle of operation
This strategy is built around signals from the Moving Average and RSI indicators, whose settings are specially configured to determine the slightest changes in the value of the asset, suitable for the conclusion of the transaction. As a trend indicator, the Moving Average is used in the system in two variants of parameters and in a double exponential type, which provides the MA lines on the graph with additional smoothing.
The RSI indicator, as a filtering signal MA oscillator, is applied with a reduced period, enabling to enter the market on signals, the duration of which will be enough to close the transaction profitably. Thus, you will receive signals about a short-term trend change in the market and just for an hour of trading you will be able to conclude up to 10 deals.
Customize the template
If you have chosen a professional terminal for trading, you can easily set up a template for this technique on the chart. For example, for this purpose we will use Binomo’s platform, which comes with a proper set of functions – a bunch of built-in indicators with the function of additional customization and a large-format graph of quotes with the second timeframe. Having opened the chart of an asset with moderate volatility, you need to apply on it the indicators used in the system with the following settings:
- MA – type 2-exponential, period 7,
- MA – type 2-exponential, period 12,
- RSI-period 8, levels 50/50.
For trading in the scalping mode, you should use the 15-second interval. However, if you want to slow down the trading mode a bit, you can also work with the 30-second interval. After the configuration the graph of quotes on your terminal should look this way:
Rules for concluding contracts with the Kolibri strategy
Your primary task in trading with this strategy is to identify the signal indicator and promptly conclude a contract for it. Short-term trend changes will be reported by the indicators in the form of intersection in a certain direction of the double exponential lines and the movement of the RSI zonal line above/below the level of 50. The transaction should be concluded immediately after the appearance of indicators not to lose time before the price turns to another direction. You can forecast an increase in the value of the chosen asset on the condition that:
- The double exponentials crossed in the upper direction, reporting a new trend in the market,
- The zonal line crossed the trend level upwards, confirming the turn of the quotes.
In the screenshot below you can see how these figures appear on the graph: You can forecast a decrease in the cost of the chosen asset on the condition that:
- The double exponentials crossed each other in the lower direction, reporting a new trend in the market,
- The zonal line crossed the trend level down, confirming the turn of the quotes.
In the screenshot below you can see how these figures appear on the graph:
As you can see, the signals in this strategy are highly cyclical and their accuracy makes it possible to derive profits in 85% of your transactions.
The expiration time
For the positions being opened on the timeframe 15 seconds a suitable expiration will be 2 minutes. If you reduce the dynamics of your trade to the interval of 30 seconds, then the expiration of your bids should be set for 3 minutes. For the specified time, the asset’s price will have time to make a breakthrough in a new direction, but it won’t have time to turn back before the expiry date. Therefore, if you follow all the rules of trade on this strategy, it will work with the striking effectiveness.
In the mode of high-frequency trading, the amount of risk in each transaction should be reduced to 2%-3% of the volume of the deposit. Thus, you will avoid devastating losses in a series of failed contracts. With a small operating capital, trading should be carried out with 1-dollar lots. For example, such a minimum transaction size is available at Binomo.