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Volatility Index 75 Strategy: Think Beyond The Limits

This document provides a strategy for scalping the volatility index 75 using a combination of indicators on multiple timeframes. The strategy involves detecting signals on the 15-minute timeframe, confirming them on the 5-minute, and checking the 30-minute and 1-hour timeframes for trends. Potential trades are entered using stop orders on the 5-minute chart with targets of 100 pips. Rules are provided around position sizing, profit targets, and avoiding greed. Examples are given of how to determine entry and exit points using indicators like Bollinger Bands, RSI, Stochastic, and MACD.

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Tieba issouf Ouattara
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14K views

Volatility Index 75 Strategy: Think Beyond The Limits

This document provides a strategy for scalping the volatility index 75 using a combination of indicators on multiple timeframes. The strategy involves detecting signals on the 15-minute timeframe, confirming them on the 5-minute, and checking the 30-minute and 1-hour timeframes for trends. Potential trades are entered using stop orders on the 5-minute chart with targets of 100 pips. Rules are provided around position sizing, profit targets, and avoiding greed. Examples are given of how to determine entry and exit points using indicators like Bollinger Bands, RSI, Stochastic, and MACD.

Uploaded by

Tieba issouf Ouattara
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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VOLATILITY INDEX 75 STRATEGY

THINK BEYOND THE LIMITS

LEARN HOW TO TRADE VOLATILITY INDEX


VOLATILITY INDICES STRATEGY: EXPLAINED
(EMPHASIS ON VOLATILITY 75 INDEX)
STRATEGY OVERVIEW

Trading Type: Scalping


Timeframes: 5 minutes (M5), 15 minutes (M15), 30 minutes (M30) and 1 hour
(H1)
Trade Execution Timeframe: 5 minutes (M5)
Signal Detection Timeframe: 15 minutes (M15)
Confirmation Timeframe: 30 minutes (M30) and 1 hour (H1)
Indicators: Bollinger Band, Relative Strength Index (RSI), Stochastic Oscillator
and MACD

Below is a table showing the function(s) of all indicators to be used in the


strategy:
INDICATOR FUNCTION
Bollinger Band Measures Volatility
Relative Strength Index (RSI) Measures Market Exhaustion
Stochastic Oscillator Measures Momentum
MACD Direction and Momentum

STEPS TO TAKING A TRADE


1. Set up all indicators on your MT5 app (as instructed in the previous guide).
Please ensure all parameters are 100% correct and check again to confirm.
2. To detect a potential trading signal for further analysis, switch your chart to
M15 (15 minutes timeframe).

SELL SIGNAL ↓

✓ Stochastic Oscillator (Blue Line) must reach the 80 level


✓ RSI (Black Line) must reach the 70 level
✓ MACD histogram forms a peak
✓ The price must touch the upper Bollinger Band
✓ Candlestick rejections forms
✓ Check again to be sure
BUY SIGNAL ↑
✓ Stochastic Oscillator (Blue Line) must reach the 20 level
✓ RSI (Black Line) must reach the 30 level
✓ MACD histogram forms a trough
✓ The price must touch the lower Bollinger Band
✓ Candlestick rejections forms
✓ Check again to be sure
3. When all the conditions for sell or buy are met on M15, draw a straight line to
mark out the anticipated reversal point.
4. After drawing a line on M15, move to M5 for further confirmation. Take the
following actions if you see any of the following on M5:
Scenario 1
All the conditions met on M15 are also met M5
Action: Mark as HIGH POTENTIAL SET UP
Scenario 2
All the conditions met on M15 are not met on M5
Action: DISCARD TRADE IMMEDIATELY AND WAIT FOR ANOTHER SIGNAL ON
M15
Scenario 3
All the conditions met on M15 are about to be met on M5
Action: WAIT PATIENTLY FOR COMPLETE SIGNAL FORMATION ON M5 BEFORE
ENTERING
5. In the case of Scenario 1, you must carry out the following simple analysis
before entering your trade:
• Switch to M30 and H1 timeframes to check if the price is moving in a
direction opposite to your short-term prediction. If it is, DON’T ENTER A
TRADE. This is because a strong fake reversal might occur which will most
likely hit your stop loss.
Example:
The conditions for SELL have been met on M15 and confirmed on M5. But
when you checked M30 and H1, you noticed that the BUYING POWER is high.
This means price might not respect the signal and move along with the trend
instead.
To detect the trend direction on both M30 and H1, you will check the
crossover on Stochastic Oscillator and MACD histogram formation.
BUY BIAS: Stochastic Blue line crosses the Red and moves upward, while the
MACD predicts an upward movement.
SELL BIAS: Stochastic Blue line crosses the Red and moves downward, while
the MACD predicts a downward movement.
6. If all these conditions are met, you can safely enter your trade on M5.

HOW TO ENTER A TRADE


1. All trades should be executed and monitored on M5 only.
2. Before entering a trade, decide on the lot size to use depending on the size of
your account. (We have a different guide on that)
3. In this strategy, we won't be making use of Instant Execution option, instead,
we will make use of Stop Orders (SELL STOP or BUY STOP). This will prevent
us from entering the market too soon.
4. When all your signals have formed on all timeframes, switch to M5 and place a
STOP ORDER few PIPS below (For a SELL TRADE) or above (For a BUY TRADE).
5. Stop loss should be placed a few pips above the highest or lowest candlestick
(depending on the type of trade). Note that there is always a possibility of a
retest before final movement.
WARNING: ALWAYS SET STOPLOSS AND DON’T USE A LOT SIZE THAT IS BIGGER
THAN YOUR ACCOUNT SIZE!
WHEN TO EXIT A TRADE
There are methods you can use to determine when the movement is done.
1. The Bollinger Band
✓ Price reaches the middle band or
✓ Price reaches the last band
2. The Stochastic Oscillator
✓ The blue Stoch line touches the opposite level e.g. For a SELL trade, the line
moves from 80 level and approaches 20. Vice versa for BUY.
3. Constant PIP target per trade
✓ I personally target 100 pips per trade irrespective of the movement. This
1000.0000 points per trade based on observation.
✓ You must monitor 1 and 2 to determine when to opt out of a trade
prematurely.
There is a separate guide on how to calculate the number of pips on Volatility 75
Index. Study it well.

RULES
1. Don't be greedy. Make use of stop-loss and appropriate lot size.
2. Your total opened positions should be equivalent to your normal lot size
depending on your capital.
3. Have a daily profit target to eliminate greed or overtrading.
4. If a signal is not complete, don’t trade it.
5. If you are not confident with the strategy, don’t trade it.
6. Make sure you read up articles on all indicators during your back-testing
period.
7. Don’t trade an amount you can’t afford to lose.
8. Be confident in yourself as a trader.
9. If you are a new trader and you are not familiar with any of the terms
mentioned above, please Google them out or register for a foundation training
program.
10. Trading is risky irrespective of the strategy.
This strategy works for me and my students, I hope it works for you also.

REGISTER FOR A TRADING ACCOUNT WITH BINARY.COM TO GET STARTED!


VOLATILTY INDEX TRADING RESULTS (HIGHLIGHTS)
Thank you for reading this guide, hope you found it useful, if you”d like to
know more about volatility index. You might be interested in my training
programme.

Mpho Ramochela Trevor

For Mentorship programme


Premium Forex, Binary & indices course

For Premium Signals


Forex, Binary & Indices
Whatsapp : +27 73 160 0643
Email:[email protected]

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