The wise trade strategy will have the same rules of conduct for both the BUY and SELL (strategy works in both ways giving buy or sell signals). The point is that when we make the strategy work in one direction, it obviously will work in another direction as well. This will definitely be easy when we make guidelines for one direction (BUY) which will use us as a counterpart to further development of the strategy for SELL.
The initial thesis is what the wise trade strategy contains the tools and what signals these tools give. Each BUY and SELL strategy should include the following tools:
1. Wise Trade Custom Built MA 89
2. Wise Trade Custom Built MA 55
3. Wise Trade Custom Built Stochastic Oscilator
4. Candlestick pattern (tweezers, engulfing, pin bar, Harami, Doji (evening star I Morningstar)
Wise Trade Custom Built Moving Averages (MA) are indicators that serve us to define the direction in which a given instrument is moving. To define a clear direction of the instrument, both moving averages used need to point in the same direction on both time frames (TF).
The direction for buy condition is met once lower MA(55) is above the larger MA(89) on both TF’s. And vice versa, sell conditions are met once 55 is below 89 MA.
The second condition is that at the lowest TF we get a wise custom-built stochastic oscillator cross-section of the exponential curve over a simple curve in the zone below 20 (for bullish) and above 80(for bearish). This means that if a clear arrangement of MA is defined at 1D + 4H then at 1H we need a stochastic cross. If the schedule of MA on 4H and 1H is clear, then we need the crossing of stochastic at 15 min. This means that in the strategy we have 3 TFs, two larger for trend or direction recognition and the lower for stochastic cross-section, which is usually used as an entry point for the trade.
The third condition is that after defining the trend and the cross-section of the stochastic in the zone below 20, we get a clear candlestick pattern on the smallest TF, in other words, according to the same schedule as above. For the obtained trend and cross-section of the stochastic with 1D and 4H, it is necessary to obtain a candlestick pattern on the 1H together with the stochastic. If we have a strategy defined on TF 1H and 4H, then we need a candlestick with a stochastic for 15 minutes.