This trading strategy was first developed for the forex market, but modified for use in the binary options markets. This strategy uses three indicators:
A customised MACD histogram which changes to blue colour when the asset is heading upwards, and turns red when the asset is
trending downwards. This colour change allows you to catch a trend change much earlier than the traditional MACD...
The 50 EMA (Exponential moving average)
The 110 EMA (Exponential moving average
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The strategy will be used exclusively for the Call/Put or Rise/Fall binary option trade. you shall be looking for an
opportunity in which the MACD histogram changes colour in tandem with a cross of the 50 EMA crosses the 110 EMA in the same
direction as the change in colour dictates, or a bounce of the price on the moving average in the direction of the MACD clour
Taking the trend will involve the following:
1. Determining if the right trade to make is a Call/Put or Rise/Fall
2. Setting the appropriate expiry
3. Setting the trade parameters
CALL OR RISE:
For a Call or Rise option trade, you must execute the following:
1. Check to see if the 50 EMA is above the 110 EMA
2. Check to see if the price is bouncing off the 50 EMA at the same time, see if the MACD histogram is now a blue colour. If
these parameters are satisfied trade the Call or Rise option...
PUT OR FALL:
For a Put or Fall option trade, you must perform the following:
1. Check to see that the 50 EMA is below the 100 EMA.
2. Check to see if an upward moving price is resisted at the 50 EMA line, at the same time, see if the MACD histogram is now
a red color... If these parameters are satisfied trade the Put or Fall options.
SETTING THE EXPIRY:
The expiry that you choose will depend on the expiry time provided by default on the broker platform, and then the time frame
chart on which the analysis is performed...
Most turnkeys platform will the following expiry time:
On the 1 hour chart, one candlestick represent price activity for one hour. For the 15 minutes chart, a candle is 15 minute
of price action... you can on this basis, make an informed estimate as to how long the price action you are trading on will
last, and use same to set the expiry.
If you estimate a Call or Rise to last 6 hours (or 6 candlesticks on an hourly chart), then you can set the expiry between
2hours - 4 hours son as to be sure that the trade expire with the trade firmly in your favour...
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