The «Scope» Strategy For 5-Minute Online Trading
Basic technical analysis using a limited range of indicators is possible on many trading terminals, including Binomo (site). This is a good choice for beginners. More advanced traders prefer to conduct binary options trading market analysis on special platforms created for that purpose.
For example, the TradingView live chart supports several thousands of various indicators. Many of the developments are custom ones created by trading enthusiasts. And there are many really effective solutions among them. In this article we will look at the 5-minute «Scope» strategy based on two modified versions of AK TREND and MACD.
Overview of the indicators and strategies
- MACD Peak Indicator is an improved version of the classic version of this indicator. The main difference is the presence of additional smoothing lines. Another difference is purely visual: it consists of one curve instead of two. The main signal is the intersection of the neutral boundary, which divides the window into two halves, as well as a change in the direction of the histogram bars. For this strategy, trading is conducted upon receiving the signal of the Moving Average crossing the neutral border. The MACD Peak Indicator’s appearance is classic – it’s a histogram that is built in a separate window, as well as the Moving Average curve.
- AK TREND input params – the original version of AK_TREND with the presence of an additional input parameter, as indicated in its name. If you look at the calculation formula in the source code, it is easy to notice the presence of an additional line with the adline parameter equal to zero. Without going into technical details, we can just say that the presence of an additional input parameter gives the tool additional functionality. Now it can move within the window with a gradation from 0% to 100%, and it also has color indications for the active phases of the trend.
The tool consists of one line which is either red or green depending on the market situation. The moment the fill changes is the key reversal signal. To make it easier for traders, there is an additional option in the indicator parameters that makes the candles on the chart either red or green. Having a fill color on the chart makes it easier to visually determine the prevailing price trend, but it actually erases the difference between the up and down price bars. A trader who has a certain amount of trading experience will have no difficulty distinguishing the candles, despite them being the same color. For beginners, this may be more difficult, but it isn’t that big of a deal (binary trading for beginners).
Setting up trading platforms
Technical analysis is carried out on the TradingView chart (site: https://www.tradingview.com/). This is a free service where the basic functionality, which is all that most traders need, is available immediately after registration. You will need to trade on the site of any platform from the ranking of reliable companies on our site (ranking of binary options brokers). The best choice is Binomo, the company that is second in the ranking, but it is the best possible option for this strategy.
For convenience, you can open the trading platform and the live chart for technical analysis in different browser windows, and put them side by side. This is especially convenient on large displays (21 inches or larger). Or you could also open them in adjacent browser tabs. The time frame of 1 minute does not require such a high reaction rate, so it is possible to go to another tab, set the necessary parameters for the trade, and enter the market in time.
Step-by-step setup instructions:
- open the live charts from TradingView in one tab, and in the other the terminal from Binomo or another company;
- in both tabs, select the same trading asset, set up the charts exactly the same: candlestick mode with a time frame of 1 minute;
- we add two indicators to the TradingView chart: AK TREND input params and MACD Peak Indicator;
- customize the appearance of the MACD by selecting the type of histogram as columns;
- we increase the thickness of the AK TREND input params line, as this will facilitate our visual perception of the signals.
Trading signals on the strategy
The trader should pay attention to two things – the position of the MACD curve relative to the dividing border and the color of the AK TREND curve or the chart.
The signal for an increase is when the AK TREND curve and the chart change color from red to green, and the MACD line goes into the upper half of its window, crossing the horizontal border.
The signal for a decrease is the transition of the MACD to the lower position, the intersection of the N/A border. The fill of the chart and the AK TREND curve change from green to red.
Interpreting signals on the Scope strategy is as simple as can be. Green in trading traditionally means growth, and red is a fall, so trading should be based on this principle. Moreover, there should be no significant time difference between the signals and the maximum deviation is 2 candles. If the distance between the signals exceeds this value, it is recommended to refrain from entering the market. The power of the strategy lies precisely in the synchronicity of both instruments.