How to combine the SMA with the Awesome Oscillator to trade on the Binomo platform


Combining SMA and AO
Combining SMA and AO

Some strategies are based on more than one indicator. The one I am going to show you today combines a Simple Moving Average with an Awesome Oscillator. It is always good to learn about trading strategies. This way you will have a wider range of choices. So let’s see how to use the SMA in combination with the AO.

Chart preparations

You must be logged in to your Binomo trading account. Choose what kind of financial instrument you are going to trade during the session. Set the chart type for Japanese candlesticks. This type of chart is the easiest to read. The timeframe should be set for 5 minutes.

The next step is to add the indicators to the chart. You will find them under the indicators icon. The Simple Moving Average default period is set at 10. For today’s strategy, you will have to change it to 100. You can also adjust the colour and width of the line according to what is more pronounced for you.

Then, search for the Awesome Oscillator and add it to the chart. The settings remain as default. The AO will appear beneath the price chart in the form of the bars that develop below or above the middle line. This type of graph is called a histogramOpens in a new tab..

Crypto IDX 5-minute chart with SMA(100) and Awesome OscillatorThe chart timeframe was set at 5 minutes. Your transactions should be kept open for 5 to 6 times longer than the candles period. So set the expiration time for 25 to 30 minutes.

expiration time
Choose your expiration time to cover the next 5 or 6 5-minute candles

Trading with the SMA and the AO on the Binomo platform

With the chart set, you just have to keep your eyes open and follow the indicators. They will produce signals to enter the trade.

Up trades

To enter a trade for the price increase, there should be an uptrend in the market. The signals when you are trading along with the trend are always stronger and more accurate. Wait for the price to cut the SMA line and then confirm a signal with the AO. A bar on the oscillator histogram should be green in colour. Now you may enter an Up trade for around 25 minutes.

A signal to open Up trade with SMA and AO
A signal to open an Up trade with SMA and AO

Down trades

Observe the market and wait for the downtrend if you wish to open a trading position for the price decrease. A signal is produced when the price cuts the SMA line, and you get a confirmation in the form of the red bar on the Awesome Oscillator histogram. Open a short transaction and keep it open for around 25 minutes.

A signal to open Down trade with SMA and AO
A signal to open a Down trade with SMA and AO

Summary

A strategy presented today is quite straightforward. You have to set the chart, add the indicators to it and wait for the signals to open trading positions.

There are two indicators that work together. One is the Simple Moving Average, the other the Awesome Oscillator. A signal is received when the SMA is intersected by the price. You get confirmation from the AO by looking at the colours of the bars.

No strategy can guarantee you profits. But there is a demo account on Binomo where you can practice any new approach you come across without worrying about losses. Go to the real account when you feel ready for it.

Enjoy trading!

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