In trading, if they use all of the available margin, their accounts might virtually double over night or they could lose everything in a couple of hours. Trading professionals keep their leverage to a minimum and never take such a big risk. The setup for the “hunting” technique couldn’t be any easier—all you need is a price chart and one indicator.
What tools you need for the “hunting”?
The setup is as follows: you require an Alligator indicator and a price chart. As you are aware, alligators are ferocious hunters who hide in the bushes to pray on their prey. A technical analysis technique called the Williams Alligator indicator employs smoothed moving averages. The indicator begins by calculating a smoothed average using a simple moving average (SMA). It employs three moving averages with periods of five, eight, and thirteen. The jaw, teeth, and lips of the alligator are represented by the three moving averages. For building trading signals, the indicator uses convergence-divergence relationships, with the Jaw making the slowest rotations and the Lips making the fastest. Hunt while the Alligator is hunting is the general guideline in trading. There is just one decision to be made: call or put? Let’s look at the screenshot that is provided below.
Because the indicator is pointing downward and the lines do not connect, it appears that all positions are suitable for a PUT contract. The price is moving against us, so it is a mistake and a path to failure.
When to buy a contract with “hunting” strategy?
We require other signs, or so-called “assisting tools,” to determine the buy signal:
Remove all levels other than the 50th using the 14th period of the Relative Strength Index (RSI). The RSI refers to a momentum indicator that assesses recent price changes in order to determine if a stock or other asset’s price is overbought or oversold.
A momentum indicator called the stochastic oscillator compares a security’s closing price against a range of its prices over a given amount of time. By changing that time period or taking a moving average of the outcome, the oscillator’s susceptibility to market changes can be reduced. It uses a 0-100 limited range of values to provide overbought and oversold trading signals. Use the Quotex platform’s recommended default settings.
The two lines on a stochastic oscillator chart typically represent the oscillator’s three-day simple moving average and its actual value for each session.
More tips on trading with Hunting Strategy
The hunting trading technique is intended for shorter timeframes, namely those between 5 and 15 minutes. We advise choosing a brief expiration period, such as 2-3 candles’ creation time. While the Alligator is hunting and all lines are moving upward, this is the fundamental signal to execute the CALL contract. If the RSI is above the 50-level and the fast Stochastic (blue line) crosses the slow one from bottom to top, as illustrated in the screenshot below, it will confirm the trend.
When a sleeping period shifts to a downhill movement, a sell indication develops. When the alligator is hunting, a PUT contract is carried out in accordance with the hunting strategy, and its lines are pointed downward. If the RSI is below the 50-level and the fast Stochastic (blue line) crosses the slow one from top to bottom, as illustrated in the screenshot below, it will confirm the trend.
Three potent trading tools—Alligator, RSI, and Stochastic—are used in the hunting trading method. Another key reversal signal is the divergence between the stochastic oscillator and trending price action. An indication that bears are running out of steam and a bullish reversal is about to occur, for instance, is when a bearish trend makes a new lower low but the oscillator prints a higher low. Both the stochastic oscillator and the RSI are popular price momentum oscillators in technical analysis. While frequently being utilized together, they each have unique underlying theories and approaches. The stochastic oscillator is based on the notion that closing prices need to move in a direction that is almost parallel to the current trend. In other words, the stochastic oscillator formula performs better in predictable trading ranges, whereas the RSI was created to gauge the rapidity of market fluctuations.
Install all three of the strategy’s indicators on the price chart of your financial instrument to begin searching for trade signals. Use the default options if they work for you, or experiment with them to find ones that do.
The hunting trading technique is a condensed version of Bill Williams’ sophisticated and multifaceted Alligator method. Try combining the method with traditional technical analysis, such as price patterns and support and resistance levels, to increase the reliability of the signals.
Q: What is the hunting strategy in trading?
A: The hunting strategy is a trading technique that involves identifying and exploiting market inefficiencies to make profitable trades. It involves actively searching for price discrepancies and taking advantage of them.
Q: How can I use the hunting strategy on Quotex?
A: Traders can use the hunting strategy on Quotex by monitoring market conditions, identifying price discrepancies, and placing trades accordingly. It’s important to have a clear trading plan in place and to use risk management strategies, such as stop-loss orders, to minimize potential losses.
Q: What are some tips for trading with the hunting strategy on Quotex?
A: Traders should monitor market conditions closely and be prepared to act quickly when opportunities arise. It’s also important to use technical analysis tools and other indicators to identify potential price movements and to have a clear trading plan in place.
Q: What are the advantages of using the hunting strategy on Quotex?
A: The hunting strategy can provide traders with the ability to take advantage of market inefficiencies and potentially make profitable trades. It can also be used in combination with other trading strategies to further improve trading performance.
Q: Are there any risks associated with using the hunting strategy on Quotex?
A: Like all trading strategies, there are risks associated with using the hunting strategy on Quotex. Traders should be aware of potential market volatility, market conditions, and other factors that could impact their trades. It’s also important to use risk management strategies, such as stop-loss orders, to minimize potential losses.