In addition to the usual tools for analysis, such as building graphical models, levels and trends, as well as indicators, ExpertOptions provides such type of analytics as signals. Signals are a set of technical indicators configured in a special way. They can be used as an independent source of information when opening a trade, which provides considerable help in the matter of profit-making. Yet, the most effective use of them is in combination with various trade strategies as a confirmation of signals. This method will allow you to get an 80% triggering probability and increase the likelihood of gaining profit after entering the market.
Support and resistance levels plus signals
We all know that there are different price levels, and when they are reached, they usually stop. These are the levels of support and resistance. The strategy associated with their use implies the opening of trades after breaking through the price of this level. This is a strategy of trading at the level breakout. However, it does not happen all the time that the price breaks through the level and goes immediately in the direction of penetration. Sometimes, after breaking through the level, it makes a U-turn and falls back below the level. How can one know whether it is advisable to open a trade at the moment of penetration? The use of signals will help you obtain the answer to this question.
Here is an example of this use.
In Fig. 1 we see that the price has broken through the resistance level. According to our strategy, this is a signal to buy a call option. However, we see that the signal on GBPUSD shows the average downward direction force. What does this mean? It means that it is now risky to buy a call, since there is an average strength probability of downward movement. As you can see in Fig. 2, the signal was justified and the price returned to the point below the level. In this case, buying a call option will result in a loss instead of a profit.
After we have avoided a losing trade, the level got broken through once again and a signal to buy the put option was obtained.
As shown in Fig. 3, there was a breakout with a strong downward signal. This indicates the maximum probability of making a profit if the trade is immediately opened. What happens after the expiration time is over, is shown in Fig. 4 and Fig. 5.
As you can see, the use of the signal in this case brought a confident profit.
Here is another example of the successful use of signals along with the levels. To begin with, we expect a breakout and a signal (Figure 6).
Opening the trade (Fig. 7).
Waiting for profit (Fig. 8).
Indicators plus signals
Usually a trader does not limit himself by constructing only. An experienced trader will also use indicators. Let’s analyze the use of signals in the example of a strategy with three moving averages of different periods. First, we wait for both the confirmation signal of the indicator and the ExpertOption signal (Fig. 9).
Then we open the trade (Fig. 10).
Afterwards, we wait for the profit (Fig. 11).
As the above examples show, ExpertOption signals work best as a supplement to the main strategy. They are effective and increase the number of profitable trades. This example lists the use of only a few strategy options in conjunction with the company signals. You can find your own version of the strategy and use the signals as a supplement to it.