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Scalping or high-frequency trading on the minimum price fluctuations is one of the fastest ways to increase trading capital in the short term. But it must be understood, that when doing scalping on binary options the risks of loss increase substantially. For optimizing the overall result, there are several simple approaches. Setting the indicator You can already tell from the name of the system that this strategy generates trading signals using the RSI. For scalping on the RSI, we need to adjust the indicator correctly. As you can see, we have only changed the layers display parameters that define overbought and oversold zones. The fact that during the fluctuations of quotations on tick charts, the price is very responsive to such areas, and if you leave the default settings, you may not get the full information about the behavior of prices in the extreme zones.
The quotes will just move and keep coming back to their levels, so the trend reversals will be hard to determine. Such reversal patterns of the RSI indicator is a highly effective signal to trade short-term options. This indicator very accurately responds to short-term changes in the direction of movement of quotations and is indispensable in high-frequency trading binary options. Money management and expiration Scalping on the RSI, as we have said, is an approach to trade binary options with high risks.
Who’s online There are currently 13 users online. Submitted by User on February 12, 2011 – 13:57. Here is a simple scalping strategy on the one minute chart. The second indicator is RSI at the default settings. When the price penetrates the upper band and the RSI is above 70 consider entering short and exit at the center line or 3-5 pips. When the price penetrates the lower band and the RSI is below 30 consider entering long. This strategy is effective in a ranging market.
If there is a trend, wait for the price to penetrate the center line indicating the trend is over before entering long or short. For confirmation, you can add Stochastics at the default settings. Submitted by User on February 12, 2011 – 14:11. The interesting part is that it not always possible to backtest it, or find enough examples on the historical charts, because when price breaks the upper Bollinger line and RSI is approaches 70, the RSI indicator will cross 70 for a short moment, giving you a signal.