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Trading with the Envelopes indicator and the Stochastic Oscillator is a powerful combination for identifying potential entry and exit points in trending and ranging markets. The Envelopes indicator plots two bands above and below a moving average, creating a dynamic range where price tends to fluctuate. When price reaches the upper envelope, it can signal an overbought condition, and when it touches the lower envelope, it may indicate oversold conditions. This makes Envelopes particularly useful for spotting potential reversals or pullbacks within an existing market trend.

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The Stochastic Oscillator complements this by measuring the momentum of price movements, showing traders when the market is potentially overbought or oversold. Its two lines, %K and %D, oscillate between 0 and 100, with readings above 80 often signaling overbought conditions and readings below 20 suggesting oversold conditions. When used alongside Envelopes, traders can wait for the Stochastic to confirm a potential reversal indicated by price touching an envelope band. For instance, if the price hits the upper envelope and the Stochastic is above 80 and starting to cross downward, this could be a strong signal of a potential short opportunity.

Combining these two indicators allows traders to filter out false signals and trade with higher confidence. A common strategy is to look for price to touch the lower envelope while the Stochastic is in oversold territory for a potential buy, or price to touch the upper envelope while the Stochastic is in overbought territory for a potential sell. By waiting for both conditions to align, traders can increase the probability of entering trades at high-probability reversal zones. Additionally, traders often enhance this setup by confirming the trend direction on higher timeframes to avoid trading against strong momentum.

📊 Indicator Settings:
âś… Envelopes: Period 10 | Deviation 0.05 | SMA
âś… Stochastic Oscillator: %K 5 | %D 3 | Smoothing 3 | SMA

📊 Best Time to Trade:
European Session, New York Session
(⚠️ Avoid major news events)

Open A FREE $50K Demo Account: https://pocketoptioncapital.com

Money Management:
It is important to follow up with this strict rule of investment:
If you have $100 in your account, each open position should be $5 tops
If you have $200 in your account, each open position should be $10 tops
If you have $500 in your account, each open position should be $25 tops
If you have $1,000 in your account, each open position should be $50 tops
If you have $2,000 in your account, each open position should be $100 tops
If you have $5,000 in your account, each open position should be $250 tops

We're currently in our 13th year helping traders become successful in the live markets so we know a thing or two about leveraging a small account into serious wins.

Risk Disclaimer:
Trading options involves financial risk and may not be appropriate for all investors.
Transcript
00:00settings you'll need. Envelopes indicator settings, period, 10, deviation, 0.05, moving average, SMA.
00:09Stochastic oscillator indicator settings, percent K, period, 5, percent D, period, 3, smoothing,
00:173, moving average, SMA. That's it. No complicated charts, no confusing tools. Just a clean,
00:24effective strategy you can start using right away. This method can boost your confidence and
00:29help you make better trading decisions, even if you're just getting started. But before we dive in,
00:35do me a quick favor, hit that subscribe button, give this video a like, tap the bell icon so you
00:40never miss our powerful strategies every week. Quick disclaimer, binary options trading involves
00:46financial risk. This video is for educational purposes only, not financial advice. Past
00:53performance is not a guarantee of future results. Always trade responsibly and never risk money you
00:58can't afford to lose. Now, let's go over the strategy rules step by step, so you know exactly
01:05how to trade with confidence. Buy trade, wait for the price to touch or go below the lower line of
01:10the Envelopes indicator. Check if the stochastic lines are crossing each other, then wait for a
01:16bullish candle to appear. This is your confirmation. Once all these conditions are met, take a buy trade
01:22with 4 minutes expiry. Sell trade, wait for the price to touch or go above the upper line of the
01:28Envelopes indicator. Check if the stochastic lines are crossing each other, then wait for a bearish,
01:34red candle to confirm the trade. Once confirmed, take a sell trade with 4 minutes expiry. Use 30-second
01:42candles and set your trade expiry to 4 minutes. That's it. Simple, clean, and powerful. No guessing,
01:50just follow the setup and wait for the right signal. Now, before we jump into the live trade
01:55example, here are a few quick risk management tips to help you trade smart. Risk management tips.
02:01Always stay calm. Avoid emotional decisions. Risk only 1% to 5% of your balance per trade.
02:08Never risk more than 10% of your total capital. Practice first on a demo account. Backtest the
02:13strategy to build confidence. You'll also find the full indicator settings, bonus trading tips,
02:19and helpful links in the video description below. Don't forget to check it out.
02:23Now let's move to the most exciting part. Live trade example. Let's see how this strategy performs
02:29in the real market. Let's go. Here, I've taken a sell trade. Let me walk you through exactly why.
02:36First, as you can see on the chart, the price touched the upper line of the Envelopes indicator,
02:41and even went slightly above it. That's our first signal that the market might reverse.
02:45Then I checked the stochastic oscillator. Look closely. The %K and %D lines crossed each other
02:52at the top, which usually indicates a possible downward move. Now, this is important. I waited
02:58for a bearish candle to form after the crossover. That gave me the confirmation I needed. Once all
03:04these conditions were met, I confidently placed a sell trade with a 4-minute expiry. Let's watch this
03:10trade play out and see how it performs step by step on the chart. You'll notice how the market
03:16slowly starts to reverse in our favor. This is the beauty of combining a reversal zone,
03:22envelopes, with a momentum indicator, stochastic. It gives us higher accuracy and better confidence
03:29when entering a trade. We still have some time left in this trade, so stay with me. Let's see the final
03:34result together. And yes, we've won this trade. As you can see on the screen, this trade closed
03:40in profit. Now imagine doing this with proper risk management, discipline, and a solid mindset.
03:46You can slowly build consistent profits even in the OTC market. And don't forget, the market won't
03:52give you 100% results every time. That's why practicing on a demo and following money management
03:58rules is key to long-term success. Here, I've taken a buy trade. Let me show you exactly why I entered
04:05this position. First, take a look at the chart. The price touched and slightly moved below the lower
04:11band of the envelopes indicator. That's our first signal that the market might reverse upward.
04:16Next, we look at the stochastic oscillator. Notice how the blue and orange lines have crossed each other
04:22at the bottom of the range, near the 20 level. This signals potential upward momentum. But we don't
04:29rush. We wait for confirmation. And right here, we got a bullish candle forming just after the
04:34stochastic crossover. That's our go-ahead signal for a buy trade. With all three confirmations,
04:40I confidently entered a buy trade with a four-minute expiry. Let's watch this trade together
04:46and see how it plays out in real time. This setup is a great example of high-probability entries.
04:51You're not just guessing. You're following clear signals with logic and patience. And remember,
04:58not every setup will be perfect. But when you stick to the rules and wait for confirmation,
05:02you greatly improve your chances of success. Boom! Another winning trade. This buy trade just
05:09closed in profit, all by following our simple and powerful setup. Now here, I've taken another buy trade.
05:16Let me show you exactly what I saw. First, notice how the price dropped down and touched the
05:21lower line of the envelopes channel. That's our first sign that the market may bounce back up.
05:27Then, I looked at the stochastic oscillator below the chart. You can clearly see that the blue and
05:32orange lines crossed each other right near the 20 level. This means the asset is oversold and might
05:38soon go up. And most importantly, right after the crossover, a bullish candle, pink, appeared. That gave
05:45me the final confirmation I needed. So based on this confirmation, I entered a buy trade with a
05:51four-minute expiry. Let's wait and see how this trade performs. We lost this trade. And that's
05:56completely normal. Even with all the right signals, no strategy wins 100% of the time. The setup was
06:03perfect. But the market still went the other way. That's trading. Losses happen. What matters is
06:09discipline and risk management. We kept our risk low, so one trade doesn't impact the big picture.
06:16Stay consistent, follow the rules, and focus on long-term results. Let's move on and look for the
06:22next opportunity. Now here, I've taken a sell trade. Let's quickly go over why. First, the price touched
06:29the upper line of the envelopes indicator, signaling a possible reversal zone. Then, the stochastic
06:35oscillator showed a crossover at the top, near the overbought zone. That's our confirmation of
06:40potential downward momentum. And right after that, a bearish candle appeared. The final green light to
06:47enter the trade. With all conditions met, I entered a sell trade with four-minute expiry. Let's wait and
06:54see how this trade plays out. And yes, we've won this trade too. This was a clean setup and the strategy
07:00worked just as expected. Throughout this video, you've seen how simple rules, discipline, and
07:06confirmation-based entries can give you high-probability trades, even in the OTC market. Just remember,
07:14stick to the rules, manage your risk, stay patient and consistent. Mastering one solid strategy is better
07:21than jumping between many. Practice this one, backtest it, and grow your confidence with time. If you found
07:28this video helpful, make sure to like the video, subscribe to the channel, drop a comment below
07:35if you want more live trading examples or have any questions. Thanks for watching and I'll see you in
07:41the next video. Until then, stay focused, stay disciplined, and keep trading smart.
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