- We need to add 55 sma and 144 sma.
- Then add Bollinger Bands. Setting will be 21 for period and 2 for deviations.
- After that, we add Stochastic. Settings will be 8 for period and 3 for both sma.
How we trade?
Rulse 1: Trend is your friend!
144 SMA and 55 SMA are for following general trend. Yes, I know that we try to be smarter than everyone and catch the trend reversal but let us be realists and just keep following trend. When slow sma is above fast sma then we have declining trend. However, if fast sma is above the slow sma then market is in rising trend. We are prefer sharp trends. Sharper than 40degree is better.
We will look into Bollinger’s central and lower Bands in rising trends and upper and central bands for declining trends. Central band of Bollinger have to be above 55 sma and rising for us to think about buying in rising trend. In a declining trend central band and have to be below 55 sma.
Stochastic indicator will h…