Chande Kroll Stop indicator - profit on cryptocurrency volatility
- VFX Blog
All assets on the cryptocurrency market show high volatility within the day. This is a good way to make money on binary options. You just need to use the right analysis tool such as the Chande Kroll Stop indicator.
Type: Trend & Channel
Timeframe: Any in the range M1-M5. In our case, M1 is used, but with an increasing period of analysis, the accuracy of the signal increases.
Trading asset: Any options trading signals. The main requirement is a fixed (2-3 points) spread and no hidden fees.
Trading time: All Forex trading sessions.
Percentage premium option: Not less than 70-75%.
The strategy uses two technical indicators:
- Chande Kroll Stop with period 14. It belongs to the group of trend indicators that show changes in volatility. The "classical" description considers the upper border to be the level of maximum profit on the transaction, the lower border to be the level of losses. In crypto trading options, the breakdown of the boundaries will be the first opening signal. The delay is less than the Moving Average!
- Detrended Price Oscillator (DPO) with length 21. The main difference between this tool and most other oscillators is the ability to ignore the influence of long-term trends. Eliminating the directional effect greatly simplifies the process of analyzing short pullbacks and corrections in the crypto market. This helps to identify strong reversals in the development of long trends.
After installing the tools, the terminal's working window looks like this:
- UP (CALL) option. The price breaks both or only the upper border of the Chande Kroll Stop from bottom to top. The Detrended oscillator is above zero levels.
- DOWN (PUT) option. Opposite crypto signals: The price moves down through the channel or below the lower border, Detrended below zero.
- The Chande Kroll Stop can be used on all crypto assets. There are more false signals on altcoin – high volatility with low liquidity. More reliable than Ethereum, Litecoin and Bitcoin signals. If the basic settings are changed, we always start with the number of periods, this may be sufficient.
- The Detrended Price Oscillator cannot be used as the only option opening tool. It shows good short-term corrections and pullbacks. This indicator is one of the best. But, if you do not confirm the crypto trading signals of the oscillator, trading will be similar to guessing.
- Bitcoin will be the basis of any crypto trading strategy. Other currencies follow, albeit with a delay. The Ethereum exception - there are opposite rollbacks and corrections. This is usually the case when publishing important events about the currency, speculative actions are short-term and almost do not occur.