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The Slice strategy for beginners

The Slice strategy is a trading system based on three oscillators. They are Bill Williams’ Awesome Oscillator, the Stochastic, and the Commodity Channel Index (CCI). This combination of three tools ensures the trading signals pass through 3 levels of filtering. Thus, the trader can recognize with high accuracy the best moments to enter the market. The strategy is suitable for beginners since, from a technical point of view, there is nothing complicated about it. However, this does not diminish its potential.

A feature of this strategy is that it allows you to earn not only on reversals of the main trend, but also on relatively short periods of correction. This will be seen clearly on the Awesome Oscillator’s histogram and this issue will be discussed in more detail later. The system is considered a short-term strategy, therefore it is optimally suited for the Binomo trading platform. That is what we used when writing this overview.

A brief overview of the oscillators used

Awesome Oscillator. Developed by Bill Williams, who found this tool truly unique in terms of technical analysis. However, if you discard emotions, then this indicator, of course, does not have any fundamental advantages over other oscillators, but it is still an effective tool for analyzing the market.

CCI (Commodity Channel Index). A classic oscillator that was created as an analytical tool for commodity exchanges, hence its name, which has survived to this day. However, a few years after its development, traders noticed that the indicator was universal. As a result, it began to be used by traders and analysts of not only commodity markets, but also stock and financial ones. With the advent of Forex and online trading, CCI has been introduced to publicly accessible trading platforms. The indicator is in the TOP 20 of the most popular tools for technical analysis. It is also present in the Binomo assortment.

Stochastic. An oscillator showing the development phase of trends on the market. Oversold is a state when a downtrend has exhausted its strength and the price is ready for reversal. Overbought is the opposite situation, when an upward price trend begins to weaken. These are optimal moments to enter the market since, from a technical point of view, nothing is actually holding the price. That’s why it usually rolls back freely in the opposite direction (like a sine wave).

Setting up the trading terminal

Any assets can be traded using the strategy. However, you should focus primarily on the percentage of profit offered by Binomo. The chart interval should be 5 seconds. This is the minimum time frame for candlestick mode.

Setting up the trading terminal

The Awesome Oscillator has no configurable parameters, so you just need to add it to the chart. For the CCI, you can adjust the period, but in this case the standard value (20) is quite appropriate. When adding the Stochastic, you will need to change its default settings. First, increase the period to 20, and second, establish the border of overbought and oversold areas at 50.

Trading signals for the strategy

Signal for an increase. A change of color of the Awesome Oscillator columns from green to red. A breakdown of the CCI by a neutral line located in the middle. Intersection of the Stochastic in the overbought zone (above 50). Illustrated in the picture below.

Signal for an increase

Signal for a decrease. Intersection of the Stochastic in the oversold zone (below 50). A change of color of the Awesome Oscillator histogram columns from red to green, as well as an intersection of the middle border of the CCI curve.

Signal for a decrease

The first signal we get from this combination of indicators is, as a rule, the Stochastic’s. However, we need to enter the market only after the closing of the signal candle, on which confirmation from the other two oscillators occurred. Also worth noting is another key nuance: the picture from the Binomo terminal posted above shows a signal of an upcoming correction. If the bars on the histogram have changed color but have not crossed the N/A level, this is a sign that the trend has not reversed.

Conclusion

Trading rules are universal and applicable to any strategy. First of all, this is the number 1 principle of money management. It says that a trader should not risk too much money. The maximum limit is set as a percentage of the current balance of the trading account and is equal to 5%. The recommended investment amount is 1% or less. The second nuance is the time of trading. Transactions cannot be opened during a period of time when key news is being released. You can find the schedule in the Economic Calendar, which you can get to using the toolbar on the left.

Start trading

 

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The Slice strategy for beginners updated: October 7, 2018 author: admin

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