If you can choose only one strategy to trade in Olymp Trade, which strategy will you choose? Surely that would be the best strategy. In this article, I will introduce you to the strategy using the combination of SMA and RSI indicators. This is the most effective way to make money when participating in Fixed Time Trade at the moment.
- 1 Perfect trading orders following the trend
- 2 How to open an order with SMA + RSI indicators in Olymp Trade
- 3 Review good trading orders opened in Olymp Trade using the RSI indicator and SMA30
- 4 One last word
Perfect trading orders following the trend
If you are a trader, you need to more or less understand and identify the trend because of its importance. Think of the trend as a friend and keep this the mantra in your mind: “Trend is my friend”. Now you have a secret about how successful traders make money. The rest will be a trading strategy that helps you choose good profitable entry points.
The accuracy of the SMA in trend detection
There have been too many articles guiding the use of SMA to identify a trend. However, very few articles can tell if the market is continuing its current trend or not. This makes you not confident in opening an order when seeing the price is going up or falling deeply. It leads to losing the best opportunities to make a profit in Olymp Trade.
The following is an example of an SMA in a long uptrend. It will make traders hesitate when preparing to open UP orders.
Future trends are unpredictable things. However, when it has come a long way, the bullish force must have weakened. At that time, there is a high chance that the price will reverse at any moment. Now, an indicator that predicts the speed and force of the price is essential to predict whether the trend will continue or not.
Identify the price speed and movement with the RSI indicator
If you are using the RSI indicator just to find reversal points, then perhaps, you are not using all of it. In addition to announcing the currency pair being overbought or oversold, the little-known use of the RSI is to help traders predict the continuation of a trend.
When the RSI is above the 50 zone, the uptrend is in progress.
When the RSI is below the 50 zone, the market is in a downtrend.
How to open an order with SMA + RSI indicators in Olymp Trade
The combination of the SMA30 indicator and the RSI indicator provides the safest entry points.
+ Open an UP order when: the Japanese candlestick chart is above SMA30 (uptrend). The entry signal is when the price retests the SMA30 and rebounds. At the same time, RSI also tests the 50 zone and then rebounds.
+ Open a DOWN order when: the Japanese candlestick chart is below the SMA30 (downtrend). The entry signal is when the price retests the SMA30 and declines. The RSI indicator also touches the 50 zone and then goes downs.
Review good trading orders opened in Olymp Trade using the RSI indicator and SMA30
Conditions: A 5-minute candlestick chart. The expiration time was 5 minutes.
Currency pairs: EUR/USD, GBP/USD.
Capital management: Classic (balanced investment)
1st order: On October 21, the GBP/USD pair was in an uptrend when the Japanese candlestick chart was above the SMA30. The entry signal was when the price touched the SMA30 (green line) and rebounded. At the same time, the RSI indicator rebounded when entering the 50 zone. Opened an UP order with an expiration time of 5 minutes for $200 => result: I lost.
2nd order: On October 21, the EUR/USD pair price was trending up. Opened an UP order when the price touched the SMA30 and rebounded. At the same time, RSI also touched the 50 zone and rebounded => result: I won.
3rd order: On October 22, the EUR/USD pair was in a downtrend when the Japanese candlestick chart was below the SMA30. Opened a DOWN order when the price touched the SMA30 and bounced off. At the same time, RSI also touched the 50 zone and went down => result: I won.
4th order: On October 23, the GBP/USD pair price was in an uptrend. Opened an UP order when the price touched the SMA30 and turned up right after that. The RSI indicator also turned up from below the 50 zone => result: I won.
5th order: On October 23, the EUR/USD pair was trending up. Opened an UP order right when the price touched the SMA30 and rebounded. The RSI indicator also turned up from below the 50 zone => result: I won.
One last word
The trading strategy using SMA and RSI is trusted by trend traders. They provide security when opening orders. Don’t rush into the market with the above theory. You may be a good and receptive reader. However, if you have not experienced practice on a Demo account, then you may not avoid fatal mistakes. Therefore, do not ignore the practice. Practice well before you want to make money in Olymp Trade.