Trading strategies are often based on indicators. Some are centred on one tool, others on more than one. A strategy described in today’s article will use three of them. Its name, Triple O Strategy, derives from the fact, that these three indicators belong to the oscillators group. Let’s see what it is all about.
Key Takeaways🔑
| →Triple O Strategy uses three key oscillators: RSI, Williams %R, and CCI. |
| →The strategy can be applied across various timeframes, from 5 to 60 minutes. |
| →Successful trades are signaled when at least two oscillators cross overbought or oversold levels. |
Contents
Triple O Strategy – chart preparations
The three oscillators that are required in order to use the Triple O Strategy are:
- Relative Strength Index (RSI)
- Williams Oscillator (Williams %R)
- Commodity Channel Index (CCI)
Go to the Indicators icon and select the Relative Strength Index. You will need to change its settings. You can do it by clicking the pen icon that is visible in the indicator window.
The period of the RSI should be set at 7.
This indicator oscillates between 0 and 100 values. You will notice three horizontal lines. 50 is the middle line. 30 and 70 levels mark the oversold and overbought areas.
The next indicator you have to add is the Williams Oscillator. Leave its period as default at 14. The overbought and oversold areas are set at levels -20 and -80. It is important you mark small boxes next to the “Upper Band” and “Lower Band” in the settings of the indicator. This way the lines will be visible on the chart.
Also, choose the “Line” option for the visual display of the Williams %R. It makes it easier to follow.
The last oscillator needed is the Commodity Channel Index. You do not need to change its settings. Leave the period at the level of 20. The oversold and overbought levels remain as default as well.
Using Triple O Strategy on Olymp Trade
Once you are logged in to your Olymp Trade account, choose the financial instrument. Change the chart type for Japanese candlesticks. Choose the amount of money you wish to invest and add the three indicators described above.
The Triple O Strategy can be applied to different timeframes, from 5 to 60 minutes. It allows opening trading positions for a time 2 or 3 times longer than the timeframe you are currently using.
There are 3 oscillators that constitute Triple O Strategy. It is, however, enough to obtain only 2 signals from them. Naturally, 3 signals are better, but you can enter a trade with only two signals.
Below, you will see an exemplary chart prepared for trading with the use of the Triple O Strategy.
Oscillators are displayed one by one beneath the price chart. They all have oversold and overbought levels marked.
To open a transaction for the price increase, you should wait for a minimum of two of the oscillators to cross the oversold level from below.
If you want to open a trade for the price decrease, wait for a minimum of two oscillators to intersect the overbought line from above to bottom.
In our example below each oscillator has generated trading signals.
Pros and Cons of Triple O Strategy 👍👎
- 👍Adaptable across various timeframes
- 👍Utilizes proven technical analysis tools
- 👎Requires constant monitoring of charts
- 👎May not suit all types of traders, such as those who prefer fundamental analysis
| Oscillator | Settings |
|---|---|
| Relative Strength Index (RSI) | Set period at 7. Mark levels at 30 (oversold) and 70 (overbought). |
| Williams Oscillator (Williams %R) | Leave period at 14. Set levels at -20 (overbought) and -80 (oversold). |
| Commodity Channel Index (CCI) | Leave period at 20. No changes required for levels. |
Summary
The Triple O Strategy is based on three oscillators, the Relative Strength Index, the Williams Oscillator and the Commodity Channel Index. You need to change some settings in order to use the strategy with success.
Wait for the signals which are produced when the oscillators cross the oversold or overbought levels. You can open transactions whenever you notice two or three trading signals.
Test the Triple O Strategy in the Olymp Trade demo account. This is an excellent place to practice new techniques. Once you know the strategy well move to the live account to earn great profits.
Best of luck!
Q&A 🙋♂️
- Q: What is the Triple O Strategy?
- A: Triple O Strategy is a trading approach that involves the use of three oscillators: RSI, Williams %R, and CCI.
- Q: Can the Triple O Strategy be used for all timeframes?
- A: Yes, it can be applied across various timeframes, from 5 to 60 minutes.
- Q: When should I enter a trade using this strategy?
- A: You should enter a trade when at least two of the oscillators cross overbought or oversold levels.
- Q: Are there any downsides to the Triple O Strategy?
- A: One potential downside is that it requires constant monitoring of charts. Also, it may not suit all types of traders.