In a recent article, we have analyzed the terminal of our favorite options broker – Olymp Trade. And today we will review in detail the most relevant and reliable indicators that are present on the platform of the broker Olymp Trade.
Firstly, there are a few facts about the indicators. The indicator is an expert advisor in some way, it analyzes the chart as a person and assumes its further activities. We would like to note that it assumes but does not give a 100% guarantee. That’s important. Moreover, different indicators use different approaches and formulas for analysis, and their “assumptions”, as people’s assumptions, may differ. This implies the following basic rules for the use of indicators. We will discuss them and continue to analyze the indicators and their signals.
Rules for working with indicators:
- There is no such indicator which gives 100% correct (positive) signals. There is always a certain percentage of false signals. That brings us to rule 2.
- Use several indicators at the same time, as each one has false and true signals, and the use of two indicators can reduce both false and, unfortunately., true signals. But do not use directly 3….5 or more indicators, as it can happen in the company of people – advisers, everyone will offer their signals and trading strategies will not work at all!
- Check with different time frames (TF). This rule means that one indicator can behave differently at different time frames. For example, if you have a fast time frame (1-15 minutes), then the same moving can behave more aggressively than for time frames of 1 hour or more.
- Check with different pairs and assets. That’s also a very important rule. One indicator can behave differently and with different assets, there will be less false signals, for example, with currency pairs and so on. This is all due to the fact that different assets are affected by news and other factors, which in turn affects the results of the indicator.
- And finally – be sure to check the indicator with different parameters. Many indicators have their own internal parameters, the change of which allows you to adjust the number of false signals in the smaller direction! Check!
So summary about indicators – check, test and learn! Do that and everything will work out! Now let’s start the review about the indicators used on the Olymp Trade platfrom.
We will build the review in the following way. We write the name of the indicator, its brief description and indicate with the arrows the point of purchase in the diagram / option sales– they are signals!
They represent some curves. They have only one parameter – INTERVAL. By changing it, we can make the curves both sharper and smoother. The point is to place several (at least two) curves on the chart and monitor their intersections.
Signal: if the faster curve crosses the slower one, it’s a signal! In this case, if the intersection occurs from the bottom up – a buy signal. When there is a crossing from top to bottom – a sell signal! It’s simple!
- Parabolic SAR. SAR means STOP and REVERSE. From the name it is already clear that the indicator shows the stop and turn of the asset movement. This indicator is very popular and, of course, it is present in the terminal Olymp Trade.
Signal: At the moment when the indicator points are “thrown” on the opposite side of the chart, you can look at it as a signal and as the moment to open a trade. Don’t forget about false signals. And connect additional indicators.
- MACD. This indicator uses moving averages but it is more informative. It is presented in the form of two moving averages with adjustable parameters and a histogram. All these lines oscillate above and below the ZERO line. We will definitely pay attention on it.
Signals: There are two kinds of signals. Moving average crossing, as in indicator 1. The second signal is when the histogram crosses the zero level. The trade should be opened in the direction of the intersection! Look at the diagram.
Signals: There are two lines on the indicator chart – 30 and 70, the intersections with them will be of interest to us. So, if the curve of the INDICATOR crosses the level 70 top down – that is a sell signal. If the INDICATOR line crosses the 30 level from below – upwards, it is a signal to BUY! Check!
- Awesome Oscillator. AKA a wonderful oscillator. Perhaps, my favorite indicator, of course it is based on the platform Olymp Trade.
It is a histogram that fluctuates relative to the zero level. Green lines mean the predominant movement of the asset up, red – down. What should you pay attention to?
Signals: Two types of signals – crossing the histogram with a zero mark – open a trade in the direction of intersection. The second signal is a “bump”, that is a change in the color of the histogram, for example, from green to red, when the histogram is above the 0 mark. This is a sell signal. If the histogram is below zero and the color of the histogram changes from red to green – a buy signal!
- Bollinger Bands. This indicator would be covered by the asset chart, placing it in a certain channel. The diagram shows that the price fluctuates almost always within its limits. And as soon as it comes out of the channel, it goes back into the channel and to the opposite wall.
Signal: Short-term way out of the asset chart to the outside of the channel is a signal to open a trade from the side of the return call to the channel. Just note, that a long touch of the channel wall leads to a rebound of the chart and is a signal to open a trade in the direction of rebound!
We are reviewing further the reliable platform indicators of Olymp Trade.
- Stochasitc. This is a typical oscillator – a curve oscillating line relative to the zero point. In this case, there are two lines. Their movement and intersections show us the possible direction of the asset change. Signal levels are 20% and 80%.
Signal: When crossing BOTH lines of the oscillator with the mark 80 from top to bottom – open a down trade. And when both lines cross the level 20 from the bottom up – open an up trade. Simple? Let’s check!
- CCI. The same oscillator can be used with other indicators of the Olymp Trade platform. The curve fluctuates relative to the zero point, sometimes it crosses the levels 100 and -100. We will pay our attention to them.
Signal: As with many oscillators, let’s look at the deviation of the curve. If the curve returns from the top after the deviation and crosses the level 100 from the bottom up, it is a signal to open a down trade. If it deviates down, the curve returns and crosses the level -100 from the bottom up, it’s time to open a trade to buy!
- Alligator. The indicator is superimposed directly over the asset chart. It consists of THREE moving averages. Fast, medium and slow. Each is shifted to the left by a certain value (it can be set up). At the same time we see the fluctuations of all three moving and their intersection. Sometimes we see how after crossing the curves begin to diverge and go in any direction without crossing. This is a comparison with the mouth of an alligator. When the lines intersect – the mouth is closed, when the line starts to disperse and to go without crossing – “mouth open”.
Signal: the discrepancy is a signal to open a trade in the direction of the differences (the alligator starts “to eat”) – we can observe the change of the trend! If the lines are constantly crossed but do not diverge (red cross), the alligator is “sleeping”, we do not open a trade and are waiting!
That’s probably all that we wanted to tell you about the indicators of the trading platform Olymp Trade. The next article will be devoted to a review of three new strategies for profitable options trading with Olymp Trade. Watch carefully!
All the best and see you in Olymp Trade!