Every game has its own rules and every smart player always has his own strategy. But among hundreds of different indicators, can you pick a few and combine them to create an effective money-making tool? If you are still quite confused, then follow my article on how to set up and use the Mountain Stream trading strategy. Maybe it will help you answer the above question.
What is the Mountain Stream?
Mountain Stream is an extremely simple and effective way to trade chosen by professional traders in Olymp Trade. Because popular trend indicators are the foundation of this strategy, it gives amazing trend entry points.
How to set up Mountain Stream trading strategy in Olymp Trade
If you are already a VIP member of the platform, it is very simple. Just go to the indicator, select the strategy and click on the Mountain Stream strategy. If not, you can still set the strategy manually like this:
First choose the Weighted Moving Average (WMA) and the Average Directional Index (ADX) indicator.
The WMA indicator is set to 5.
With the ADX indicator, hide the ADX, leaving only the +DI (blue) and -DI (red) lines.
After the setup is complete, we will have the interface as shown below
How to enter a trade with Mountain Stream trading strategy
The Mountain Stream strategy pursues a simplified style of trend trading. So it does not need to meet too many conditions to open a trade.
You just need to observe the path of the price trend plus the confirmation of 2 indicators WMA and ADX to be able to find a nice entry point.
Open an UP trade when the WMA starts to rise from the bottom. At the same time, the ADX indicator crossed each other. The green line (+DI) is above the red line (-DI) and both of them expands.
Open a DOWN trade when the WMA starts to fall from the top. At that time, the ADX indicator crossed. The red line (-ID) is above the green line (+ID) and both of them expands.
No matter how good a trading strategy you have, it is still very difficult to make a profit without building a suitable capital management method. Thus, the way to manage capital must be shaped as soon as you have chosen for yourself a unique way of trading. If you can’t think of it, you can refer to the Classic management.
You can use the Classic method with a win rate over 60%. This is considered the most popular way of risk management for traders. It is very simple and easier to apply with other strategy.
For example: If you have 100$ with a maximum of 5 orders/day, each order is 20$. You only need to win 3 orders (60% rate) to have profits for your account.
As mentioned above, the Mountain Stream strategy is very simple and highly effective. In addition to Vip traders in Olymp Trade, it is also used by seasoned investors to make profits every day. I believe it will also bring you success during your trading process. Don’t forget to test on a Demo account before trading with real money.