Advance SMI Ergonic Oscillator Trading Pattern

By | November 20, 2014

Wednesday, November 19th, 2014 by Tim Lanoue

Finding the right technical indicator to use in a trading pattern can be difficult, especially when you are just starting out with trading binary options and have no little to no knowledge about the fundamentals of trading. The focus of this article today is provide all you novice traders, along with experienced traders, a highly effective 5 to 15 minute trading pattern. This trading pattern will require the use of two technical indicators which are extremely useful when trading reversals.

Simple Moving Average

As many of you may know by now the simple moving average is one of my favorite technical trading indicators to use when trading binary options. I take that back, it actually is my favorite technical indicator, as you may have notice I include this indicator in about every one of my trading patterns. This is simply due this technical indicators amazing ability to generate trading signals. There are three different types of moving averages: simple, exponential and front-weighted. All three of the moving averages differ from one another and provide different measurements and functions. For this binary options trading pattern we are going to use a simple moving average set at a period of 2. Meaning that we are seeing the average price of this asset during the past two trading days. Once that is done you need to change the offset of this indicator to -2 (negative two). In the picture below you can see an example of how to edit the period of this indicator and the offset of this indicator. The charting solution that I use as well is freestockcharts.com.

SMI Ergonic Oscillator

Oscillating type of indicators are a very effective trading indicator to use when trading with binary options. Oscillators are defined as an indicator whose sole value oscillate above and below a 0.00 level. The value of the indicator will indicate to us whether the asset is currently showing signs of being overbought or oversold. This is particularly helpful in our trading pattern because our it’s based on trading reversals, depending on whether the value of the indicator is below or above the 0.00 level will dictate our type of investment. The indicator itself is not strong enough to use on it’s own in a trading pattern but when combined with other technical indicators it can be extremely effective. In the picture below you can see how to add this indicator to your charting solution if you were using www.freestockcharts.com as your charting solution.

The SMI Ergonic Oscillator Trading Pattern

When using this high success rate trading pattern we want to make sure that we are trading an asset, preferably a currency pair, that displays relatively low volatility. Basically meaning that the likelihood that the asset will change directions due to minor market fluctuations is small to none. Some popular currency pairs that fit this criteria are as follows: Eur/Usd, Usd/Cad, Nzd/Usd, Usd/Chf and Aud/Usd. Once we have an asset or two selected we make sure that the time frames that we are watching our assets is set to 10 minutes. This is a 5 to 15 minute expiry trading pattern, this works great with the classic option style of trading which is offered by most brokers. Once you have done the above just make sure to add your indicators which is shown in the pictures above. In the picture below you can see this trading pattern in action.

As you can see the offset of the simple moving average indicator acts as a great way to predict future price action reversals. As like with most of my trading patterns, our simple moving average indicators acts as our signal generator. When this indicators crosses a candle of our SMI Ergonic Oscillator then we can look forward to part two of this trading pattern. So a cross has been established, the last step is to make sure that a confirmation candle appears above or near our cross. Sometimes a confirmation candle won’t always appear above the cross, it may confirm your reversal a candle or two later which is still alright. Any confirmation candles that don’t appear before two candles of the oscillator is a no trade. In the picture above you can see examples of our confirmation candles and where our arrows are indicates the type of trade we would place at that moment.

When our moving average line crosses our SMI Ergonic Oscillator indicator in an upward direction and we have a green confirmation candle appearing above the break within two candles lengths then we go ahead and place a CALL trade for 5 to 15 minutes. On the other hand, when our simple moving average indicator crosses our SMI Ergonic Oscillator indicator in a downward direction we have to wait for a red confirmation candle to appear above the break within our two candle lengths, once the following has been confirmed then we can place a PUT trade with an expiry time of 5 to 15 minutes.

This is a relatively new trading pattern that I have developed and I have found great success with it these past couple weeks. Out of 200 demo trades I have had 156 trades land in-the-money. Meaning I have had a success rate of exactly 78% these past two weeks. I have yet to try this binary options trading pattern with stocks but I see no reason for it not working. If you guys would trade this pattern with the currency pairs listed above along with test the following high volume stocks and let me know how you do would be greatly appreciated. Stocks to test trade: Apple, Exxon, Nike, Facebook, Twitter, Microsoft and Google. I would recommend testing these stocks on a demo account while trading from the currency pairs listed above in order to make a decent profit!

Thank you guys for reading and hope this trading pattern provides you with great success like it has done for me lately. This trading pattern can used by traders of all experience levels, whether you are new or a veteran trader the information provided to you in this article is all you need to know when using this trading pattern. As always guys if you have any questions, comments or suggestions please leave them below and with the results that you yield. Have a great day and happy trading!

10 thoughts on “Advance SMI Ergonic Oscillator Trading Pattern

  1. Tim Lanoue

    Hey Einar,

    Great question, as soon as the confirmation candle appears I place my investment. You don’t have to wait for it to close because more often than not the signal itself will not be good anymore if you wait that long!

    Hope this helped ya out!

    Tim Lanoue

    Reply
  2. Einar

    Very promising strategy, Tim!

    Do you wait for the conformation candle to close, or do you take the trade immediately as you see the conformation candle?

    Reply
  3. kostas77

    I have to say that for me that is the most comprehensive and positive ten minute strategy.Good job guys.

    Reply
  4. Tim Lanoue

    Hey Dejan,

    When the indicator crosses with a SMI Oscillator candle, we need to make sure a confirmation candle is directly above it, once it is then we are good to place our investment. Your confirmation candle must be the same color as the candle that was crossed by the indicator. So if they candle was bearish, the candle above it must also be bearish and vice versa for bullish candles.

    Hope this helps you out!

    Tim

    Reply
  5. Dejan

    Please when exactly do we have to look for cross “When this indicators crosses a candle”. But its a lot of candles, do we look for the biggest candle? Or we look the middle of oscillator?

    Reply
  6. Bryan

    So I have been applying this strategy The first week I have had a good rate success but I am not too sure if it was really me or I just got lucky. I have trouble picking the right time to place the trade. Maybe I would be asking too much, but could it be possible if you could send me like a live clip on when to trade and when not to trade? Again I leave that in your hands. But I thank you in advanced regardless. 🙂

    Reply
  7. Tim Lanoue

    Hey Sehan,

    I would recommmend only using this strategy during market hours, the best market hours to trade with this strategy would probably be during the New York trading session.

    Tim

    Reply
  8. Tim Lanoue

    Hey Alex,

    Yes, that is expected! The offset is meant to help display possible reversals. That is why we have it offset to help predict the future reversals!

    Not a problem and hope this helped you out! 😀

    Reply

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