Developing a well-balanced trading strategy requires traders to determine the potential added value to the portfolio. Financial instruments are diverse in terms of trading complexity, risks, and the liquidity they offer. For example, trading options are complex, come with some level of risk, require a comparatively lower upfront investment, and offer more flexibility than trading stock. Thus, selecting a viable combination of financial instruments is a prerequisite for an optimal portfolio. Frequent adjustment of investor’s positions is also important, considering that market conditions frequently change.
If you are a registered client of IQ Option trading platform you can access dozens of instruments, including advanced ones like Quick Stick.
More about Quick Stick Indicator
The Qstick indicator has two names “Quick stick indicator” and “Qstick indicator” for short. The Qstick Indicator was designed by Tushar Chande. He designed the Quick stick indicator to quantify candlestick charts in a single indicator. Mr Chande is a scientist, inventor, author, trader, has a Ph.D in engineering and holds nine U.S. patents. He is a regular contributor to Stocks and Commodities magazine and has also published numerous papers in engineering journals and is widely recognized for his expertise in designing innovative trading systems.
The Qstick indicator is simple in its brilliance. Qstick is a scale with a single zero level and a signal line. So, the latter is nothing but a simple moving average.
Thus, the period of the indicator is the number of candlesticks on the chart, the opening and closing prices of which will be averaged.
The Qstick shows the mood of the market, allowing you to determine who is stronger at the moment – the sellers or the buyers. Characteristically, this tool is fully consistent with the concept of electronic contracts trading. Here it is enough to determine the direction of the price at the next moment in order to make a profit. No matter how many points it will pass.
How to trade binary options with Qstick
You know that Qstick is an indicator of supply and demand on the market. The zero level in this case is the dividing line between the buyers and sellers. Therefore, the most logical use of this tool looks as follows:
CALL option to buy when the signal line is above the 0 level.
The PUT option is purchased when the signal line goes below the zero level.
It is recommended to set the expiry time in the amount of two bars.
You can also use Qstick to indicate a divergence. Its signal is considered one of the most reliable in the financial exchanges.
As you can see, trading contracts with the help of the Qstick is not rocket science. However, there are some tips for improved performance. First, the tool works exclusively in a trending market. If the market is flat, the line will endlessly cross the zero level, giving you a lot of false signals.
Secondly, the period of the indicator depends on the timeframe on which you trade. On low timeframes it is recommended to use 10 to 15, on medium timeframes 15 to 25, on high timeframes 25 to 35.
In a nutshell, here are some directions. Quick stick values below zero indicate a majority of black candlesticks (over the time periods specified) and therefore a bearish bias for the asset. Qstick values above zero indicate a majority of white candlesticks (over the time periods specified) and therefore a bullish bias for the asset. The Quick stick indicator can identify overbought and oversold conditions.
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.
GENERAL RISK WARNING