The “Synergy” strategy lives up to its evocative name by juxtaposing signals from two popular oscillators, MACD and RSI. It’s worth noting that the combination of multiple indicators from different tools allows traders to offset the shortcomings of these technical analysis instruments, which, like their advantages, are undoubtedly present in each.
The Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) are, without exaggeration, legendary advisors used by millions of traders worldwide. Notably, both MACD and RSI are integral components of the trading platform on IQ Option. Therefore, there’s no need to rely on platforms from external developers.
How to set up parameters?
The preliminary setup for your trading will take no more than a minute. To customize your workspace, follow these simple steps:
- Open a chart for an asset with high volatility;
- Set up a candlestick chart and adjust the timeframe to 1 minute;
- Add the MACD tool, keeping its default settings;
- Integrate the RSI oscillator, configuring the zone to the level of 50.
Concerning the asset’s volatility, a high indicator is characterized by pronounced chart fluctuations, substantial candle bodies, and, conversely, infrequent candles without a body. In practice, volatility can be visually assessed, eliminating the need for additional tools.
Now, let’s delve into the tools in use. MACD serves as an oscillator, indicating the divergence coefficient of moving averages and providing an assessment of the current market movement’s strength. It comprises a zero level, a histogram, and a signal line.
Similarly, RSI is essential for evaluating trend strength. It features a single signal line, which in our case will fluctuate above and below the 50 level.
How to trade with Synergy strategy?
Trading options using the Synergy strategy involves relying on key signals from both indicators. For MACD, a significant signal is the exit of the signal line beyond the histogram. If the line moves out of the upper part of the chart, indicating a decrease in columns, there is a likelihood of a downward impulse. Conversely, if the line exits the histogram in the lower area, it suggests a potential sharp rise in the asset.
Simultaneously, RSI gauges the strength of the ongoing movement, positioned either above (rising) or below (falling) the 50 level.
For a CALL option, consider buying when the MACD signal line leaves the histogram area below the zero level, and the RSI is above the 50 level, moving upward.
To a PUT option, wait for the MACD leave the histogram above the zero level and the RSI falls below the 50 mark.
The expiration time aligns with the duration of two candlestick formations.
Implementing the “Synergy” system in binary options trading provides a straightforward yet effective methodology, leveraging the comparison of signals from two widely used indicators.
NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
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