Today, we show you an efficient method with the pair SMA and support/resistance. This is how to play Olymp Trade for those who like to trade with a long time frame (Set the time for which your forecast from 30 minutes or more).
How to set up SMA indicators and support/resistance at Olymp Trade
You need 2 SMA lines: SMA 10 and SMA 30. To set up 2 lines, choose the Indicator Tab, choose SMA twice.
Then you adjust the value and color of them. You should avoid the red and green color of candles or you will be confused when you look at the chart. In this case, we choose yellow for SMA10 and dark blue for SMA30.
With support/resistance, you can you the trend line on Indicator Tab so that the horizontal line that you draw will be more visualized.
Some knowledge you need when using SMA and support/resistance
Với SMA 10 và SMA 30: When SMA10 cut SMA30 from under SMA30 (after cutting, the yellow line is above the dark blue line), price tends to increase.
On the other hand, when SMA10 cut SMA30 from above SMA30 (after cutting, the yellow line lies below the dark blue line), price tends to decrease.
When SMA10 and SMA30 cut each other continuously and they tend to reach each other again, price tends to be stable => The market is sideway.
To place a good trade in Olymp Trade: Only place order when 2 SMA lines cut each other and get over the support/resistance zone.
How to trade with SMA indicator and support/resistance
Firstly, these indicators is not efficient if you use them with 1-minute-candlestick-chart. Short-term fluctuation make it unclear. Therefore, start with the 5-minute-candlestick-chart and order with time frame from 30 minutes.
Trade with DOWN when
Price cuts the support zone, goes down and the SMA10 ( the yellow line) cut the SMA30 (the dark blue line). Price may change in short time with the intersection at support zone but for the long time, price will follow its main trend (downward).
Trade with UP when
Price cuts resistance zone, goes up and SMA10 (yellow line) cuts SMA30 (dark blue line).
Summary of the strategy
Can you get a grasp of the strategy? When 2 SMA lines cut each other and begin to expand, it signs the next trend of price.
Remember, once price leaves its support/resistance zone, the market has already confirmed its new trend. And trading with the trend is the safest and most efficient strategy.
Wish you success!
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