Confrontation or «Opposition» – is an effective strategy on the basis of three indicators showing the purchasing or selling power of the market. They give trading signals to open a profitable up and down trade. The trading system is suitable for traders working with 1-minute timeframe.
How the Confrontation Strategy Works
The key indicators are Bulls Power and Bears Power. They allow you to identify a trend reversal in order to minimize risks when opening a deal. Purple parabolic dots are used to confirm the signal. This indicator helps to identify trend stopping and reversal.
The strategy is easy to use, even for beginners. On the platform, you can add indicators manually or just connect a strategy. In the second case, all tools are loaded automatically. There is no need to change the basic parameters, they are optimal for searching the signals.
Trading rules for the “Confrontation” strategy
The strategy is based on three indicators, but this does not make it trading difficult for beginners. The system is used when trading any currency pairs on a 1-minute timeframe. The optimal expiration time is 2 minutes, i.e. 2 Japanese candlesticks. The principle of using this strategy is as follows:
- Bull deal. The lines of the Bulls Power and Bears Power indicators cross the zero level from the bottom up. Parabolic points are located under the candles. Subject to these conditions, you can conclude a CALL contract;
- bear deal. The basement indicator lines cross level 0 from top to bottom. In this case, the purple dots are above the candles. If all conditions are met, open a PUT deal.
You can verify the effectiveness of the strategy in the figure below. First, let’s look at the conclusion of a deal with CALL options. Both lines have exceeded the zero level, and points have appeared on the chart. When making a deal, we get a profit in just 2 minutes.
The efficiency of the system is confirmed on PUT options. On the figure we can see that both indicators fell below zero and above the bearish candle on the first available purple dot. Two minutes after the transaction is closed, we get a profit.
Conclusions on the Confrontation Strategy
This strategy is in great demand among traders. This is due to its high security. A trading signal appears when three conditions are met, which allows you to minimize the risks. Another advantage of the strategy is the variety of entry points. During a working day, there can be at least 10 of them. One of the possible causes here is the effectiveness of the signals on a 1-minute timeframe trading.