Three Indicators Trading Strategy: Detailed Description
Author: Andrey Goilov
Today we're going to talk about the Three Indicators strategy. It's based on the use of tools such as the Accelerator Oscillator, the Awesome Oscillator, and the Parabolic SAR.
The idea is to try to catch the beginning of an impulse, and earn money on this movement. Trading is done only on the major currency pairs, and on an hourly timeframe.
We will show you how to combine signals from the three indicators, in an attempt to catch the beginning of an impulse long before it forms a reversal on the price chart. We will study the intricacies of this procedure, and detail the rules for opening and closing positions.
https://blog.roboforex.com/wp-content/uploads/2022/10/Pic-1.png
How to set up the three indicators
The processing of signals according to the "Three Indicators" strategy could take hours or days. It all depends on the size of the potential profit: the bigger it is, the higher the risk and the longer the waiting time.
Now let's talk about the indicators:
1. The Awesome Oscillator is used with standard parameters. Traders note its similarity to the MACD indicator: it shows the difference between simple moving averages with periods of 34 and 5. It is represented by a histogram that changes colour when moving averages are crossed, with green indicating an uptrend, and red a downtrend.
2. The Accelerator Oscillator is also added with the standard parameters. It is calculated taking into account the values of the Awesome Oscillator and displays the acceleration and deceleration of the driving force. In most cases, traders trade in the direction of the histogram: if its colour is red – you should not buy, if it is green – do not consider selling.
3. The Parabolic SAR represents points that are above or below the price. The trend is said to be upward as long as the dots are below the price chart. If the price breaks through the indicator and a point appears above, then the trend changes downward, which means you should sell. Often traders use the Parabolic SAR to place a floating Stop Loss: if the indicator point is broken by the price, this means the market is changing direction, and the trade should be closed.
An example of buying with the Three Indicators strategy
Consider the situation on the EUR/USD chart on 3 October 2022. On a large bullish candlestick, the Parabolic SAR has positioned a point below the indicator chart. The Awesome Oscillator and Accelerator Oscillator histogram bars immediately became green on two indicators, so we mark the candlestick as the "signal".
https://blog.roboforex.com/wp-content/uploads/2022/10/Pic-11.png
We open the trade at the opening of the next candlestick at 18:00 at 0.9813. We set the Stop Loss below the level of the "signal" candlestick at the price of 0.9756. Take Profit is equal to the Stop Loss size of 57 points, and set at 0.9870. The profit made 57 points; the price reached this target within 16 hours.
If the second variant of trade closing had been applied, when it was necessary to wait for the Awesome Oscillator and Accelerator Oscillator histogram bars to change colour from green to red, then the trade would have had to be closed at the price of 0.9819. The profit would be only six points.
Example of a Three Indicator Strategy sale
Let's look at the EUR/USD chart for 26 January 2022. The price had been declining for some time, but could not leave the limits of the sideways correction. The support level of 1.1260 is broken and a signal from the Parabolic SAR is formed: a point appears above the price chart.
On the Awesome Oscillator and Accelerator Oscillator, the bar graphs have changed colour from green to red. Mark this candlestick as the "signal" candlestick. We can open a deal when the next candlestick opens at 1.1254 at 22:00 terminal time
Read more at R Blog - RoboForex
Sincerely,
RoboForex team
Author: Andrey Goilov
https://blog.roboforex.com/wp-content/uploads/2022/10/28.10.2022-1536x662.jpg
Dear Clients and Partners,
Dear Clients and Partners,
Today we're going to talk about the Three Indicators strategy. It's based on the use of tools such as the Accelerator Oscillator, the Awesome Oscillator, and the Parabolic SAR.
The idea is to try to catch the beginning of an impulse, and earn money on this movement. Trading is done only on the major currency pairs, and on an hourly timeframe.
We will show you how to combine signals from the three indicators, in an attempt to catch the beginning of an impulse long before it forms a reversal on the price chart. We will study the intricacies of this procedure, and detail the rules for opening and closing positions.
https://blog.roboforex.com/wp-content/uploads/2022/10/Pic-1.png
How to set up the three indicators
The processing of signals according to the "Three Indicators" strategy could take hours or days. It all depends on the size of the potential profit: the bigger it is, the higher the risk and the longer the waiting time.
Now let's talk about the indicators:
1. The Awesome Oscillator is used with standard parameters. Traders note its similarity to the MACD indicator: it shows the difference between simple moving averages with periods of 34 and 5. It is represented by a histogram that changes colour when moving averages are crossed, with green indicating an uptrend, and red a downtrend.
2. The Accelerator Oscillator is also added with the standard parameters. It is calculated taking into account the values of the Awesome Oscillator and displays the acceleration and deceleration of the driving force. In most cases, traders trade in the direction of the histogram: if its colour is red – you should not buy, if it is green – do not consider selling.
3. The Parabolic SAR represents points that are above or below the price. The trend is said to be upward as long as the dots are below the price chart. If the price breaks through the indicator and a point appears above, then the trend changes downward, which means you should sell. Often traders use the Parabolic SAR to place a floating Stop Loss: if the indicator point is broken by the price, this means the market is changing direction, and the trade should be closed.
An example of buying with the Three Indicators strategy
Consider the situation on the EUR/USD chart on 3 October 2022. On a large bullish candlestick, the Parabolic SAR has positioned a point below the indicator chart. The Awesome Oscillator and Accelerator Oscillator histogram bars immediately became green on two indicators, so we mark the candlestick as the "signal".
https://blog.roboforex.com/wp-content/uploads/2022/10/Pic-11.png
We open the trade at the opening of the next candlestick at 18:00 at 0.9813. We set the Stop Loss below the level of the "signal" candlestick at the price of 0.9756. Take Profit is equal to the Stop Loss size of 57 points, and set at 0.9870. The profit made 57 points; the price reached this target within 16 hours.
If the second variant of trade closing had been applied, when it was necessary to wait for the Awesome Oscillator and Accelerator Oscillator histogram bars to change colour from green to red, then the trade would have had to be closed at the price of 0.9819. The profit would be only six points.
Example of a Three Indicator Strategy sale
Let's look at the EUR/USD chart for 26 January 2022. The price had been declining for some time, but could not leave the limits of the sideways correction. The support level of 1.1260 is broken and a signal from the Parabolic SAR is formed: a point appears above the price chart.
On the Awesome Oscillator and Accelerator Oscillator, the bar graphs have changed colour from green to red. Mark this candlestick as the "signal" candlestick. We can open a deal when the next candlestick opens at 1.1254 at 22:00 terminal time
Read more at R Blog - RoboForex
Sincerely,
RoboForex team
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