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Coincidence Strategy

Complex strategies based on a combination of several indicators and oscillators are popular among traders. Why? The answer is simple: traders believe that such strategies generate a more reliable signal. Based on two components, the Coincidence Strategy is a good example of the above-mentioned principle. Read more to learn about framework and possibilities of the presented strategy. Keep in mind that the name of the strategy is random. It has nothing to do with probability theory. Why is it called “coincidence”? Because it generates signals based on the coincidence of the two popular indicators. Two is better than one, right?

Learn the Basics of Coincidence Strategy

Let us start with the fact that Pocket Option terminal offer the indicators used in the methodology in the standard trading version. If you choose to trade elsewhere, you can easily find EMA and Stochastic on almost all trading broker platforms because they are standard tools.

The strategy uses two MAs for generating the main signal. The recommended parameters are as follows: 10 and 21. You should use different colors for MAs to distinguish the fast line from the slow one. For example, EMA 21 is colored in lilac, and EMA 10 – in blue.

You should change the settings for Stochastic from the standard 5; 3; 3 to 14; 5; 3.

As for the choice of chart, you should pick a Japanese candlestick.

As for the choice of asset, choose an asset with high volatility because Stochastic, like many oscillators, works better in a trending market. You can trade highly volatile cryptocurrencies, currency pairs or stocks with high liquidity.

As for the timeframe, it is advisable to use the shortest taking into account trading on the market of digital contracts. For this reason, Coincidence Strategy is ideal for turbo options.

How to trade with Coincidence Strategy

After the settings we can move to reading the signals and trading binary options for profit. One more thing before the start: we need to explain one aspect. Even though the Stochastic will be used on “OVER” zones, in this strategy we will not rely on the signal line going beyond the levels of 20 and 80, but on readings inside the zones.

Experienced traders know the highest market trending is happening when fast Stochastic line enter and stay within the intervals 0-20 and 80-100. The Stochastic fluctuates between 0 and 100, with readings below 20 considered oversold and those above 80 reflecting overbought conditions. Oversold readings in a large uptrend are considered bullish signals, and overbought readings in a larger downtrend are considered bearish.

Thus, the algorithm for trading with the Coincidence strategy is as follows:

CALL option on the upside when the blue line crosses the lilac line upwards, and the fast oscillator line is located in the zone of 80-100.

Execute PUT option on the downslide when the senior EMA crosses in the downward direction and the Stochastic enters the 0-20 zone.

The expiry time will be two timeframes. Depending on the timeframe you have chosen.

The strategy “Coincidence” refers to trading techniques with high reliability and a large percentage of positive transactions. Stochastics and Moving Averages work well together. Moving Averages (MAs) are ideal for trading trending markets because they smooth out price action. The two are complimentary and will confirm changes in momentum.

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