The «sWalk» Strategy For TradingView Live Charts
About 70% of the time the market does not have a clear direction of movement and it is in a narrow price corridor. This is an unfavorable period for binary options trading, as it is difficult to predict price behavior using technical analysis indicators. The task of most strategies is the timely recognition of reversals, when one trend stops and the opposite begins.
In this article we will look at the «sWalk» strategy, which is based on a non-standard custom indicator.
Overview of the indicators
The system uses two tools – the double exponential Moving Average (DEMA) and the Random Walk Index. The first indicator does not need to be presented separately, it is a popular variation of a simple Moving Average curve. The difference is having an exponent in the formula and double averaging of the results.
The practical advantage of DEMA is its maximum proximity to the real location of the price on the chart. Most of the time it moves near the candles, being a short distance from them. However, if there is an intersection with the chart, then this indicates a change in the trend.
The Random Walk Index is an indicator with a more complex multi-level formula. It analyzes data from the chart, determining the nature of current price movement. The market is a wave-like structure and the most accurate signals are generated at times of trend reversals, when there is a «tide» or «ebb». RWI clearly shows the nature of current trends of rising or falling prices, whether it a short-term correction which has no fundamental basis for continuing longterm movement, or if it is powerful trend movement that balances out reversal trends in the past.
Setting up the platform for analysis and the terminal
In most cases, technical analysis strategies are not tied to a specific trading platform. They use standard functionality and indicators available on various services. The sWalk strategy is based on tools from the TradingView user portal catalog (site: https://www.tradingview.com). Therefore, a live chart is used for technical analysis, and you can trade on any platform from our ranking of binary options brokers. For beginners, we recommend Binomo (site) due to the fact that this company is best adapted for novice traders (binary trading for beginners). But for this strategy, that issue does not play a significant role.
Step-by-step setup instructions:
- open TradingView’s live chart service and any company’s trading platform in the browser;
- in both windows, select the same asset, set the interval of the candlestick chart to 1 minute;
- indicate the amount of investment in the trading contract in an amount of no more than 5% of the current balance of trading capital;
- add the Random Walk Index and Double Exponential Moving Average indicators to the live chart;
- adjust the period of DEMA and RWI to 20, and if you like, adjust the appearance by increasing the thickness of the lines and making the colors more saturated.
Any currency pairs will be suitable as your asset. The main criterion is the percentage of profit on the trading platform. When adding the indicators, in order not to have to go through the extensive list, you can do a search using the abbreviated names of the tools: RWI and DEMA.
The TradingView chart should be opened in one tab and the trading terminal in the one next to it. If the display on your computer is large enough, you can place them side by side. But there is no special need for this, since trading is done on a 1-minute interval of the chart. Therefore, such a high reaction rate like for second time frames is not required here.
The optimal entry point into the market according to the strategy is the last moment before the closing of the price bar. The live chart displays the time until the closing of the current item in the right column of the chart, where the current asset quotes are indicated. When it becomes obvious that the signal has been formed and there will be no rollback, you should quickly go to the tab with the trading platform and open a trade.
The signal for an increase – the intersection of the Random Walk Index curves with a transition of the blue line into the upper position, as well as the candles rising on the chart to a position above the DEMA.
The signal for a decrease – exactly the opposite situation. The RWI curves intersect in such a way that the red curve is above the blue one, and on the chart the price falls below the DEMA line.
The duration of trades should be 5 minutes according to the strategy. If trading is conducted on the Binomo website or another company’s that does not have fixed binary options expiration periods, then an important nuance should be remembered: the 5-minute expiration should be set immediately before entering the market. Otherwise, the platform automatically resets this figure to 60 seconds. And the chances of successfully closing a 1-minute trade are significantly fewer than for a 5-minute one.