Profitable Trading Strategy: Indicator Settings

1. Moving Averages

Simple Moving Averages (SMA):

- SMA 50: 50-day period - helps identify medium-term trends.

- SMA 200: 200-day period - helps identify long-term trends.

Exponential Moving Averages (EMA):

- EMA 20: Period of 20 days - more sensitive to short-term price changes.

- EMA 50: 50-day period - medium-term trend.

2. Relative Strength Index (RSI)

- Period: 14 days (standard setting).

- Levels: 30 (oversold) and 70 (overbought).

3. Bollinger Bands

- Period: 20 days.

- Standard deviation: 2.

4. MACD (Moving Average Convergence Divergence)

- Fast EMA: 12 days.

- Free EMA: 26 days.

- Signal line: 9 days.

5. Average True Range (ATR)

- Period: 14 days.

6. Stochastic Oscillator

- %K period: 14 days.

- %D period: 3 days.

- Levels: 20 (oversold) and 80 (overbought).

Strategy Steps:

1. Identifying the Trend with SMA and EMA:

- If SMA 50 > SMA 200: The market is in an uptrend.

- If SMA 50 < SMA 200: The market is in a downtrend.

- If EMA 20 > EMA 50: Confirmation of an uptrend.

- If EMA 20 < EMA 50: Confirmation of a downtrend.

2. Confirmation of Trend with MACD:

- Buy when the MACD line crosses the signal line from below.

- Sell when the MACD line crosses the signal line from above.

3. Identifying Entry Points from the RSI:

- Buy when RSI <span and starts to rise (oversold signal).

- Sell when RSI > 70 and starts falling (overbought signal).

4. Confirmation from Stochastic Oscillator:

- Buy when %K crosses %D below 20.

- Sell when %K crosses %D from above above the 80 level.

5. Stop-Loss and Take-Profit Settings with Bollinger Bands:

- Set a stop-loss below the lower Bollinger Band in case of buying.

- Set the take-profit around the upper Bollinger Band in case of buying.

6. Risk Management with ATR:

- Stop-loss setting at 1.5 x ATR.