⚖️Strategy "Combining volume and balance"
Last updated
Last updated
Step 1. Go to "Add Widget" and open the Trading View tab.
Step 2. In the Trading View tab, select the trading instrument and the timeframe of interest.
Step 3. Open the "1EX Indicators" and turn on the "Balance indicator", then select the Rolling period
IMPORTANT!!!
The "Rolling period" field is the time interval for which the indicator calculates a certain value.
To get better results, you need to choose a period that will be a multiple of 20-50 times your working timeframe on the instrument chart. Lower multiplicity means higher sensitivity, higher multiplicity means lower sensitivity.
Example: TF = 5 minutes, Period = 4 hours (48 candles of 5 minutes each).
We get such a workspace window:
The value of the indicator lines:
Green line - relative value of the dominance of green candles (upward dynamics).
Red line - relative magnitude of the dominance of red candlesticks (downward dynamics).
Description of the trading strategy!!!!!
It is necessary to find a time interval in which the indicator lines converged with each other, forming the first balance point, then diverged for a certain distance and time, and converged again, forming the second balance point. After that, we stretch the "Fixed Range Volume Profile" tool over the resulting interval and determine the distance between the current price of the asset and the price at which the maximum amount of volume was traded for this interval (Point of control "POC") - this will be the potential for a deal.
Two balance points are identified on the balance indicator (indicated in the photo by points A,B), which form the interval AB.
At this interval, we apply a horizontal volume to the tool.
We check the distance from the current price (point C) to the price of the maximum traded volume (point D) - we measure the potential of the price move with a ruler.
If the potential of the move is small or the price has already reached the maximum volume level a little earlier, then it is better not to get into such positions.
Also, if the horizontal volume has recesses, then it is desirable to put the take at this level of imbalance (point E).
In this case, the potential is low -0.28% and the price came to the level a little earlier, so below is an example of a positive situation.
After the above steps, we enter approximately at the opening of the candle (at point C) and with a hold to the maximum volume level (point D).
The horizontal volume has a normal distribution compared to the previous example, as well as the potential for a price move is many times greater.
The trading result in this situation is +0.76% excluding leverage and commissions.
CONCLUSIONS:
You can use this strategy both independently and as one of the filters within a variety of trading strategies used by traders.
IMPORTANT! Trading involves risks. The user is solely responsible for their actions or inactions when using the described trading strategy. The strategy and its description are for informational purposes only. The information provided here does not constitute personalized investment advice. News, articles, expert comments, research, forecasts, and other information are presented without considering any specific investment profile, and the financial instruments or operations mentioned may not align with the expected returns, investment horizon, or acceptable risk levels for any particular user. Company 1EX is not responsible for any potential losses resulting from trades based on the described strategy or investments in the financial instruments mentioned in this publication.
