A trading strategy for the Hartley instrument

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A trading strategy for the “Hartley” instrument

Trading platform’s built-in toolkit allows you to conduct technical analysis at a fairly advanced level. Users have at their disposal the 5 most common indicators, as well as several dozen chart drawing tools. The use of various combinations allows you to implement a variety of trading strategies, as well as develop your own systems. This article will be devoted to a review of the chart tool called “Hartley.”

“Hartley’s Butterfly” is an auto-figure that is manually applied to the chart and has the characteristic shape of two “wings.” The pattern got its name from its inventor, who, based on the mathematical Fibonacci sequence, discovered a unique digital section. Harold Hartley was also engaged in teaching activities, and he published books on earning on the stock exchange and was engaged in research activities as well. We will not go into the mathematical nuances of building this pattern, instead we will immediately proceed to the instructions for using this tool.

Applying the pattern to the chart

It is only possible to trade using this figure in certain market conditions when the price is moving in the butterfly pattern. One maximum point should be observed on the chart, after which correction will take place, and then new growth will begin. It is difficult to describe this in words, so for clarity, let’s look at an example on a real chart.

To add the pattern to the chart, you need to select the tool called “Hartley” on the trading platform. This tool is used in the same way as the broken line. The order is indicated in the picture above with green arrows. After adding the first line on the chart, levels marked in green will appear. Local price extremes should definitely be within the allocated area. If this is not the case, then the current market conditions will not allow for the use of this tool.

Trading on an increase

The “Hartley Butterfly” allows you to predict the behavior of the price on the last peak of movement. The rules are simple. The main idea is that the price reverses in the area of the boundaries of the pattern. Therefore, you should enter the market at the moment when the price begins to rebound from the bottom corner of the last “wing” of the figure. In the picture below, this moment is indicated by a yellow pointer. The option was purchased after it became obvious that the market was preparing to go up – on the chart there were several rising candlesticks in a row.

Price movement trends are of primary importance, and not just their specific positions on the chart. That’s because moments when “Hartley” can be superimposed on the chart are not very common. But the main requirement is that the general outlines of price fluctuations fit into the pattern and have a similar shape.

Trading on a decrease

The rules are absolutely identical, but trading is conducted on the peak of an uptrend. Therefore, the pattern has a corresponding direction on the chart. The moment to enter the market is shown on the chart below.

The picture is similar – the appearance of a series of descending candles located on the peak of the pattern suggest that price reversal has begun. Also there is a banal rebound of prices from the resistance level, located in the area of the first price maximum. And when trading the trader should always take into account the set of signals they receive in various ways, including with the help of visual analysis of the candlestick chart.

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Real trading on “Hartley”

At first glance, this instrument may seem too complicated, especially when compared to conventional trend lines or channels. However, a little practice will be enough to make everything clear. For this purpose, we will look at a representative example of a Hartley trade under real conditions.

So, first we will add this pattern to the trading terminal. As can be seen in the picture above, the price is preparing for a reversal. But we will wait for confirmation.

After passing the peak, we purchased the option on a decrease. A picture was taken 28 seconds before the transaction was closed. As predicted, the price took a big rebound downwards. We could have purchased the option “Down” later as well, after the appearance of two downward candlesticks in a row. This is exactly what beginners should do until they have really established a “feel” for the market, which comes with experience.

After a minute, the transaction is successfully closed with a profit. We traded on a 15-second interval. This is the minimum allowable time frame. However, it is recommended to use 1-minute charts. This will reduce the number of available signals, but it will improve their accuracy.

“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”

Trading strategy on a fractal reversal with the RSI filter

Bill Williams is one of the most famous traders in the world, and he was in fact a pioneer in the field of modern trading. He founded the world’s first school to specifically teach trading on the market. To ordinary traders, he is better known as the developer of a number of popular indicators. The most popular ones are the “Alligator” and “Fractals.” In this article, we will review an effective trading strategy based on fractals and the RSI (Relative Strength Index).

Briefly about indicators

Bill Williams’ fractals have little to do with fractal mathematical theory. They are in essence local highs and lows (extremes). They are formed through automatic candle analysis. The algorithm recognizes characteristic candle combinations.

The RSI is one of the most popular indicators of the oscillator class. It consists of one line, the value of which is calculated by a sufficiently complex formula for averaging the price values for a certain past period on the chart. In this strategy, the Relative Strength Index acts as a filter. A fairly large number of fractals appear regularly on the chart, but the oscillator will help us to select the really effective signals.

Configuring the trading terminal

The strategy is not tied to specific assets, so you can choose any currency pair, except for pairs with BTC and LTC, because they have a very low profit percentage and a chart that is not suitable for technical analysis.

How to set up the platform:

The relative strength index should be configured so that its period is equal to 8, and the OverBought/OverSold zones are at the 50 mark. In order to improve the visual perception, it is recommended to color the overbought area green, and to make the oversold one red. An example of a properly configured RSI indicator is shown in the picture below.

Signal for options “Up”

Trading on an increase can occur when two requirements are met. First, there must be a descending fractal in the form of a downwardly directed triangle. It is located under a Japanese candle. Secondly, the oscillator must cross level 50 and enter the overbought zone.

Signal for options “Down”

There is nothing else that needs to be described here. The signal is similar to the first but in the reverse – an upward fractal and a transition of the RSI to the oversold area are of interest. For clarity, this moment is shown in the picture below. At the same time, entry on the market was made 3 candles after the formation of the extremum, because the confirmation from the filter was not received immediately.

An example of trading on a fractal reversal

The real effectiveness of strategies is always tested in practice, which we have done. Specifically for this article we opened a trade on the Binomo trading platform. As our asset, we used the crypto index, because excellent price formations without omissions or delays are formed on the 30-second chart. The rates of other assets are not updated often.

A strong trend was not observed; however, in order to profit from trading options contracts, a minimum deviation in the forecasted direction is allowable. So we got our $8 net profit on a $10 investment. There was a signal on the market for the purchase of an option “Down,” when the RSI again returned to the oversold zone, and above the candle there was an upward fractal.

“General Risk Warning: Binary options trading carry a high level of risk and can result in the loss of all your funds.”

Weltrade: How to conduct levels on Forex

In this article we will look at how to properly conduct levels of support and resistance.

First of all, it is necessary to determine the schedule with which you will work. In order to correctly conduct support levels of resistance, it is necessary first of all to analyze at least 20 instruments. The main criteria for choosing an asset is how much the tool itself recognizes certain technical levels. And so let’s take, for example, an asset NZD / USD.

First you need to postpone the schedule itself, so you can analyze a longer period. Next, you need to select a time frame: at least D1 or you can use W1.

On the D1 time frame, you will see the period for the last one and a half or two years, and accordingly you will be able to correctly analyze one or other patterns that were previously on the price chart.

Next, before you conduct the levels, you need to understand where the current price is in the market and what will happen when the price moves down and when the price moves up.

For example, if the price goes up the nearest pivot point — this zone.

This zone can become a strong enough line for a reversal when the market moves up.

And the bottom point:

The pivot point of the market is in this area, we noted two points for ourselves. This area is quite serious.

We also see that in the area of ​​this level, the market approached this zone quite well and even a non-reaching point was turning around.

It can also be noted that when the market moves to this level, the market constantly beats off of it, and it was not even broken the first time.

Thus, when opening a deal to sell when the price moves down, you must wait until the market breaks through this zone and after the breakdown one or another pattern can be used.

In general, when gaining an understanding of the potential of market movement, both up and down, you can already build your own strategy.

For example, here, with a probability of 60 percent, the market will go back – up from this level, respectively, from this level you can build a strategy to increase by hitting tactics from the level.

The next important level, which can also be considered

Here a cluster of shadows represent the next reversal zone. Accordingly, we constructed an averaging value between these shadows, plus or minus. This level can also be turning. In the area of ​​this level, the market is constantly consolidating and fighting off.

These shadows actually show traces of a large participant.

We also note two more zones below. It can be stated that they are close to each other. So we had another level.

The graph still has areas of accumulation of shadows and points from which you can draw levels. We also conduct them, and on the basis of the schedule looks like this.

Here is such a markup that allows you to quite quickly and quickly understand the potential of market movement and assess the situation at lightning speed.

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