Trading strategy: scalping on the RSI

Trading strategy: scalping on the RSI
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Trading strategy: scalping on the RSI. In this trading tactic for binary options, the well-known RSI indicator is used.

Is it possible to increase the amount of your trading capital at a very fast pace? Of course! For this, high-frequency trading was invented, or, more simply, scalping on minimal price fluctuations.

However, starting scalping on binary options, you must be aware that the risk of losing your money, in this case, increases significantly. However, in order to optimize the trading result, several simple and proven approaches have already been invented.

Among them is a strategy that generates trading signals very quickly, which are always highly accurate. The name of this strategy is RSI scalping, so let's take a closer look at it.

Scalping on the RSI or how to set up the indicator correctly?

Probably, many have already guessed that the basis of this strategy is the RSI indicator, which, in fact, generates trading signals.

And if earlier, in order to use this indicator on asset quotes, you had to configure it on the MT4 platform, now you can do it directly in the binary trading platform itself or use live chart for binary options.

But we still use the trading platform to carry out scalping on the RSI FinMax.

Thus, we will be able not only to analyze the asset market on our trading chart, but also manage our own trading funds quite effectively so as not to switch between charts and not be distracted, this is all true - scalping, where every second is precious.

First of all, scalping on the RSI requires the correct setting of this indicator. Therefore, when installing it on a chart, you need to set the following parameters in its settings:

Strategy: scalping on the RSI

In fact, the indicator only needs to change its values for displaying the levels that determine the overbought and oversold zones. This is necessary due to the fact that when using a tick chart of quote fluctuations, the price is characterized by a strong reaction to such zones.

Therefore, if the indicator is left with its standard settings, it will not be able to display a complete picture of the price behavior in the most extreme zones.

That is, the price will simply bounce and return to one of its levels again, and it will be difficult to determine the trend reversals themselves.

And by changing the position of the levels, in this way, we will expand the oversold and overbought zones, and we will also be able to track how the price behaves in these zones, and this is very important when scalping.

Option buy signals CALL

A trading signal that will allow you to close a CALL option trade with a profit with a high probability will be displayed by a reversal of quotes in the oversold zone:

Signal to buy a CALL option

Option buy signal PUT

A trading signal that will allow you to close a PUT option trade with a profit with a high probability will be displayed by a reversal of quotes in the overbought zone:

PUT option buy signal

Profitability of the strategy

It is thanks to such reversal patterns of the RSI indicator that one can trade short-term options quite effectively.

Another characteristic of this indicator is its sensitivity to short-term changes in the trend direction, so it is an indispensable tool for high-frequency binary trading.

It is this method of using the indicator in trading that can provide more than 80% profitable trades.

Money management

As mentioned above, scalping the RSI is a very risky approach to trading.

By applying this indicator directly to the asset chart opened in this platform, trading risks can already be significantly reduced, however, in order to fully optimize them and reduce their impact on the security of a trading account, in trading it is necessary to use the smallest amounts to conclude transactions.

Speaking directly about scalping, the most optimal amount of risk per trade would be only 2% of the deposit volume. At the same time, this cost of contracts is acceptable only if there is a sufficiently large amount of funds on the deposit.

Choice of expiration

The expiration time in scalping on the RSI can be set to 1-2 minutes.

Start trading ⇢

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