«Scalping on RSI» Strategy
Scalping or high-frequency trading on the minimum price fluctuations is one of the fastest ways to increase trading capital in the short term. But it must be understood, that when doing scalping on binary options the risks of loss increase substantially. For optimizing the overall result, there are several simple approaches. One of them – a highly efficient strategy at a high speed signal generation and high accuracy. So, we show you today a trading strategy -“Scalping on RSI».
Setting the indicator
You can already tell from the name of the system that this strategy generates trading signals using the RSI. However, in earlier times, in order to apply it to the trading chart, it was necessary to refer to the auxiliary service (binary trading terminals do not support this indicator). But things have changed.The Binomo broker continues to expand the potential of its platform and integrated this precious RSI indicator into own platform. So, for scalping on the RSI, we will use a new Binomo platform. This will not only give us the opportunity to analyze your trading chart, but will work with a high degree of efficiency managing your commercial capital.
For scalping on the RSI, we need to adjust the indicator correctly. To do this, once you installed it on a chart, change its settings to the following:
As you can see, we have only changed the layers display parameters that define overbought and oversold zones. The fact that during the fluctuations of quotations on tick charts, the price is very responsive to such areas, and if you leave the default settings, you may not get the full information about the behavior of prices in the extreme zones. The quotes will just move and keep coming back to their levels, so the trend reversals will be hard to determine. By changing the position of the levels, we get much wider overbought and oversold zones and can track the behavior of prices directly in these areas, it will be very useful for scalping.
The signal with a high probability of getting a profitable position on an UP option is a reversal of the asset quotes in oversold zone:
The signal with a high probability of getting a profitable position on a DOWN option is a reversal of the asset quotes in overbought zone:
Such reversal patterns of the RSI indicator is a highly effective signal to trade short-term options. This indicator very accurately responds to short-term changes in the direction of movement of quotations and is indispensable in high-frequency trading binary options. Applying this approach to trading is able to bring good statistics to a trader, an average of 80% of commercial contracts will be closed with a positive result.
Money management and expiration
Scalping on the RSI, as we have said, is an approach to trade binary options with high risks. By applying the indicator to a new Binomo platform(visit website) directly to the trading chart, we have been able to reduce trading risks, but they are not yet fully optimized. To minimize the loss, it is necessary to use the smallest amount of funds for execution of contracts. The optimal level of risk when scalping, you can call the limit of 2% of the entire balance, but such contracts should only be used for large volumes of trading capital. If you are into high-frequency trading with a minimum deposit of 10 USD at Binomo broker, you should draw up contracts only with a minimum bet of 1 USD. When scalping on the RSI you should use the options with expiry time of 60 and 120 seconds.