The strategy «Trend attack» for binary options
Trend strategies on financial markets have huge popularity because at the time of trend you can earn big money. As old Dow said, who was the first who gave the definition to trend: “Trend-is a trader’s friend and everything you need is to follow it”. Of course, binary options didn’t stay aside from these strategies. But we should mention that trading on this market has its peculiarities and it can be dangerous to copy trading strategies, which work perfectly on other markets.
Today we are going to speak about the strategy, which is called “Trend attack”. It came to binary options market from Forex, like many others, where it could prove itself very well, showing good profit with few slumps. It was modernized a bit for binary options, for the specific of this market. Let’s consider it together, whether it was an advantage for strategy and is there reason to include it in trader’s arsenal.
As we have already told you, this strategy is referred to trend ones and it brings the best result at the moments of clear trend motions. The strategy could show great results on Forex and it was marked and traders, working on other markets couldn’t help but use it. Binary options traders were not exception. But as trading here is specific and there is no clearly fixed levels of take-profit and stop-loss, they had to adopt it to the market.
The strategy is very simple. In its work only one indicator is used – exponential sliding average with the period 96, or EMA 96. The figure 96 isn’t random. It is the sum of hours in four days and nights. As we will analyze an hour chart, hours are important. You need not more than 15-30 minutes a day to analyze a trading system and close deals, that is advantage of this strategy, because it will be good for those, who is busy the whole day at work and can’t spend a lot of time on analyzing market situation. The strategy will be suitable for novices too, due to its simplicity. Let’s start considering the strategy.
For work we need an hour chart of currency pair GBP/USD. This asset is taken, because statistically this pair is with the strongest in-days motions, that is it is the most trend influenced. Of course, no one prohibits you to experiment with another assets, however do it on demo-account, it isn’t worth risking. When you get good result, welcome to real, but not earlier. It is necessary to put periods divisions and EMA 96 on the chart. For that we should choose the inset «Insert» - «Indicators» - «Trend» - Moving Average.
After it you should choose in the window of setting sliding type of average Exponential and set the period 96.
To put on the chart periods divisions, use the combinations of the keys Ctrl+Y. If, after all manipulations, your chart looks like this one,
you can start working with this strategy.
Our task is to find on the chart such days and nights, when the price was lower or higher than ÅÌÀ and even didn’t touch it by candle shadow. The second condition is that the price must be lower than level of closing, if it was lower than average, and vice versa, closing is higher than opening, if the price was under EMA 96. If such days and nights are found, it means that we are preparing to trade.
Let’s suggest that the price the whole day and night was lower sliding average, the second condition is also done. Next trading day at 8.00 GMT we open three options on Put. The time is identified according to Greenwich to unify the strategy. You can get to know the difference between your time zone and Greenwich one in economical calendars on the Internet.
So, 3 options are opened at the same time but for different period of time. The first for 4 hours with expiration time at 12.00 GMT, the second one with expiration time at 15.00 and the third till the end of the day with expiration time at 0.00 GMT.
These time intervals are chosen not at random. 8 o’clock of Greenwich time is the start of trading session in Europe, but at 12 they have lunch, during this time the price does a little back off from in-day moving. If the moving was strong, it is not critical, but if it wasn’t strong it is ideal time for option closing.
At 3.00 p.m. American session starts and no one knows how it will look like, it will be good if the session continues its in-day trend, but if not? If in the first half of European session the price mechanically moves on the way of previous day, in-day turn often happens at the time of American trading session.
And finally, the end of trading day for closing of last option is based on the fact that strong trend, as a rule, lasts for several days or even weeks, and that’s why the end happens not soon. There is an example of deals closing according to this trading system.
The moment of option opening is ticked, their closing is crossed. As we see, all three options closed with profits. If we continue watching this chart, we can identify that strategy gave profit two more days in 100% of all options, only on the fourth day 2 of 3 options closed with loss. So, for 4 trading days, the correlation of profitable options to loss ones is 10-2. It isn’t the worst variant, isn’t it?
You can also watch here, that all three options closed with profit for trader. If you look through the chart, so while trading strategy generated signals, general number of closed options was 12, 9 of them gave profit, 3 losses.
The strategy has proved itself very well in Forex, but binary options have their own specific, however we think, that the strategy can give you profit in any case. The only disadvantage, which we can underline, is not big number of signals of trading strategy, 3-4 a month. Although, probably, it is not so bad to close 12 deals a month, 75-80% of them closed with profit.
It will be very suitable for busy people, because to find 5 minutes to look at yesterday’s chart and 5 more minutes to close deals can be found always without any problems. But for those, who love in-day trading it will be difficult to work, because for them a day without deals is wasted day. But everyone has his own trading style, and you should understand it. We are sure, that this strategy will always have its followers.
Just trading in trend we can’t orient according to price breakdown of some important levels, because the only signal for entry the deals for us is the suggestion that the price will save its tendencies in moving even later. It means that the only kind of option, which we can use is the up and down option. That is classical option.
As you’ve understood, expiration time in this trading system is 24 hours. But if you displace the consideration of trading signals for time interval in terminal ÌÒ4 for Í4, expiration time will be 5 days, that is the time of trading week.
This system has nice profitability. It goes from one simple definition: “Trend will go on its moving than change it”. Thus, entering the side of trend direction, we will be with constant plus. More than that, the percent of paying out in binary options with time of expiration in 24 hours is minimum 150%.
That is, with starting lot in 100USD and 3-4 profitable deals will give us a week 450-600 USD of profit. But, with one suggested for this number of deals loss entry, our clear profit will be about 350-500USD.
Despite the fact that trading entries for quotations history look so “sweet”, we should always keep the precautions, having used in the system only 2%-5% from the size of own deposit.
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