The “Roof” strategy of trading on the futures market

Ted Capwell

During the quote building of any asset, the market forms cyclical extremes (minimums and maximums of the price). These points provide an excellent signal for the registration of trades. This format of forecasting has an average likelihood of confirmation at a level of more than 87%. Taking into account these factors, a highly effective trading strategy can be built on this. The only condition is to learn how to correctly determine these extremes and the probability of quote reversal from those price levels. There are many different tools for this, the most effective of them is the Fibonacci Levels, a semi-automatic chart tool. The “Roof” trading strategy is based precisely on this pattern of market fluctuations and this analysis tool.

The “Roof” trading strategy – setting up the chart

So, the main tool for generating signals on this strategy is the Fibonacci Levels, which, thanks to mathematical laws and a special algorithm, can determine the levels of market extremes. To do the markup of the trading chart, you will need to use the Fibonacci Levels chart service, which is available on professional trading platforms. The extremes can be built with the help of this chart service by combining the most recent local minima in the market history with the market maxima. To increase the effectiveness of the trading signals and market forecasts, we will apply a signal filter in the form of an Alligator indicator with the following building parameters: 6/3/1 standard shifts.

As a result, the trading chart will show the levels of market extremes and it now has a technical filter. Together it looks like this:

The “Roof” trading strategy - setting up the chart

It is worth noting that the operator, besides having the tools we need, also offers high-quality services and minimal trading conditions. Here is the basic list of technical tools and trading parameters on their platform:

  • A set of chart tools
  • An indicator set
  • More than 80 assets for trading
  • Contracts with payouts of up to 90%
  • High-speed trading
  • Terms of trading – the initial deposit is 10 USD, the minimum trade amount is 1 USD
  • Monetization of profits in 24 hours

The “Roof” strategy – trading signals

We open trades UP on the futures market under the following conditions:

  • As a result of fluctuations, the price reaches one of the Fibonacci levels and rebounds off of it (thus, quote reversal points are built at the market extremum)
  • The Alligator indicator movings reverse upwards

The “Roof” strategy - trading signal settings UP

We open trades DOWN on the futures market under the following conditions:

  • As a result of fluctuations, the price reaches one of the Fibonacci levels and rebounds off of it (thus, quote reversal points are built at the market extremum)
  • The Alligator indicator movings reverse downwards

The “Roof” strategy - trading signal settings DOWN

Expiration and money management

The “Roof” trading strategy shows optimal results when using trades with an expiration period of 120-180 seconds. Such a short period for the trade is determined by the speed of building of the trading chart, as well as the volatility of the trading instruments.

On the matter of money management, it is necessary to use the classic parameters of trading risk limitation with the following values:

  • To work with minimal amounts of trading funds, we use trades of the starting price
  • When trading with large volumes of trading funds, the price level of contracts should be limited to 3% of the amount of capital.

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