Trading binary options according to the strategy
Table of Contents
Mark the strong signals and weak signals. Once that is done you can take an average of the number of bars needed. Both for the strong and for the weak signals to move into the money. If you are using a chart of hourly prices and your signal takes an average of 3.
This could be a mid day, end of day, 4 hour or other option. If the signals takes 3. If using the hourly chart, it means 3. I am going to use a basic moving average strategy to demonstrate.
I will use the 30 bar exponential moving average. It hugs prices closer than a simple moving average and will give us more signals to count.
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Also, in order to weed out bad signals and to improve results, I am only choosing the bullish trend following signals. So, there are 15 total signals.
On average, it takes 4. Trading binary options according to the strategy means, since this is an hourly chart, that each signal will move into profitability and reach the peak of that movement in about 4 hours.
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So for expiry I would want to choose the closest expiry to 4 hours that is available. If a good choice signal for turbo options not available then no trade can be comfortably made. Do not try and force trades where they do not fit. Breaking it down a little, the weak signals peak out in about 2.
Putting this knowledge in perspective, a weaker signal might be one that is close to resistance.
Binary Options Charts If you follow trends, work with information and follow the money, you are more or less prepared and know what to expect. At any given moment you need to know what to do, whether to trade or not and even what to trade because in some cases one trade would be more beneficial than another. You need to keep many factors under consideration when youre making decisions and this is where strategies and careful planning come in handy.
A stronger signal might be one that is not close to resistance. Also, a stronger signal might be one where price action makes a long white candle and definitive move above or from the moving average whereas a weaker one might only create small candles and spinning tops.
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All too often I get asked questions about why a trade went bad in the final moments. One of the most common areas of error I find is in choosing expiry.
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Of course there can also be errors in analysis, trends or random events. But the focus of this discussion is expiry. One question you must ask yourself is: if you are trading with or against the trend. When trading against the trend I would suggest a shorter expiry than a longer one.
Simply because there is less chance of an extended move counter to the trend. Your expiry must be more precise. When you trade with the trend your expiry can be a little farther out.
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Another factor that can have a big impact on which expiry is best for a given trade is support and resistance. The relative level of prices to a support or resistance line is a factor in how likely a trade is to move in a given direction.
So, how does this apply to expiry? I purposefully did not say call or put, or bullish or bearish, because this applies to both bullish and bearish trading. Compare that to stocks, and you understand why binary options are so successful. To trade 1-hour strategy with binary options, there are a few things you have to know.
This article explains them. In detail, you will learn the three crucial steps to trading a 1-hour strategy with binary options, which are: Step 1: Finding the right indicators Step 2: Finding the right time frame Step 3: Finding the right binary options type With these three steps, you will immediately be able to create and trade a successful 1-hour strategy with binary options.
Step 1: Finding The Right Indicators The first step to trading a 1-hour strategy with binary options is deciding which type of indicator you want to use to create your signals.