Scalping strategies, with a high frequency of entry into the transaction, are an excellent solution for traders who do not like to spend a lot of time waiting for the entry point. On short scalping time frames (up to 1 minute), strategies can give dozens of signals in 1-2 hours, which, with good efficiency and a bit of luck, can bring a good profit to the trader.
The article will consider one of the most popular strategies for turbo options – “Fast John”. Last but not least, this algorithm owes its popularity to its simplicity and unambiguous interpretation of indicator readings.
Fast John requires the installation of just two technical indicators:
- RSI with a period of 5 and with one mark at the level of 50;
- Exponential moving average with a period of 5 (apply to closure).
Also, the authors of the strategy themselves recommend highlighting the red and green zones of the overbought and oversold oscillator. And the sliding one, on the contrary, should be made in a neutral color (not red and not green), so that it does not merge with the candles. Also, it is worth a little increase in the scale of the chart in order to more clearly see the intersection between the moving and the candles. After preliminary configuration, your working window should look something like this:
There are no specific recommendations on asset selection. Of course, it is better to choose highly liquid pairs that do not go into the long-term trend too often. Currency pairs of the Major type are best suited for this definition.
Timeframe, since we are talking about scalping, low. Recommended – 30S or 1M. The thing is that the efficiency of the “Fast John” practically does not change on the scale of the graph, therefore, the lower the timeframe, the more often the entry points appear, and the higher the profit, respectively.
According to trading time, there are also no special recommendations. The strategy is a rebound one, therefore, by definition, works well in the Asian and Pacific sessions. Is it worth it to follow the calendar of economic publications, so as not to enter into transactions in unpredictable periods of increased volatility? It is enough to simply avoid important macroeconomic events, which are marked by the maximum degree of influence in the Binomo calendar.
Strategies using moving averages, especially scalping ones, always have a fairly high level of error and lag in the reaction of the chart. Therefore, expiration time should always be put in 2-3 candles. In other words, for a 30-second timeframe, the deal should be 1 minute, and for a minute – 2-3 minutes.
The average efficiency of the strategy is about 70%, which is enough to make a profit in the long term, but not enough to put more than 5-7 per cent of the deposit on one transaction. Money management, even with a high frequency of entry into positions, should remain conservative.
Rules for entering a position according to the “Fast John” strategy
The main indicator of entry into a position is the intersection of a moving average price chart. If the candle crossed the line and closed above the moving one, this is a buy signal. Conversely, an intersection followed by closing under MA is a sell signal. The problem is that due to the low period of the line, this happens with almost every candle. Relatively large candles are considered to be signals, at least half of which were in the opposite zone before crossing.
And in order to separate the grain from the chaff, a filter indicator is provided. With it, everything is much simpler. The transition of the RSI to the red zone is a signal for sale; in green – to purchase. The readings of both indicators should signal the same movement and, importantly, at the same time on the same candle.