Trading strategy “Binary options Fibonacci”
The quotation chart of financial assets practically always moves in certain regularity, if you understand it, you can trade efficiently and get the profit form binary options. Everything is simple. At least, the mathematician Leonardo Pizanskiy thought so, now he is famous as Leonardo Fibonacci.
This mathematician in 1170 thought the regularity in numbers, which nowadays is used with success in architecture, mathematics, physics, astronomy and other kinds of people’s professional activity. Why traders had to be behindhand from the science, if charts of financial assets are numbers, where price and time intervals are measured.
So, practically, in all trading platforms appeared such indicators as Fibonacci nets, the using of which shows exactly all possible levels of correction, back offs and next price moving direction.
To learn to use on the quotation chart Fibonacci net, we need trading terminal MT4, which you can down load here, and also get to know the short study aids in using this software.
After you have got trading terminal MT4 in your personal computer, you should set Fibonacci net on quotations chart. For example, let’s take the chart of currency pair EURJPY with timeframe H4, after it we choose Fibonacci net, look at the side, the trend is moving to and stretch it to the direction from the spot of local turning point or minimum to local top. If the chart moves up, then we stretch the net from minimum, if down – from maximum. In other words we stretch the net to the side of the main trend moving.
Price quotations move with constant back off, coming to corrections and pushing off the levels and continue next moving to the side of the main trend direction. Thus, taking Fibonacci net to quotation chart, we can say whether that the price will continue its moving or the trend break happened and the moving to the other side happened.
- levels 23,6 and 38,2 are considered to be the price correction levels;
- level 50 is considered to be average (it is mostly used in trading with level of price back off);
- level 61,8 is considered to be deeper level of price back off for correction (points at the tendency for possible trend breaking in other side).
How can you look for the possibility to enter the market with the help of Fibonacci net? We look for signal for sale
We stretched Fibonacci net, we must identify for ourselves the level 50, what is the starting point for the next price directed moving. On the screen below you can see that the price now moves in correction and, probably, the quotations will back off to the level 50% of Fibonacci net. To close a deal with binary option for sale, we must wait till the price of asset touches the level 50 and then close a deal for binary options sale.
But as the aims of the next price moving after the bounce from the level 50 they choose levels 23,6 and 38,2, which the price reaches with more probability.
Fibonacci net is used in any financial asset, but, stretching it constantly from the nearest top to the nearest minimum and vice versa, we will always know the aims of backs off and the next moving.
Thus, it is reasonable application, we can use for trading binary options.
For trading with system “Binary options of Fibonacci”, we can use classical options, and also options: Below, One-Touch and Range, which will let us take the profit from the market with predictable price moving directions. Only before it, you need to correlate given by your brokerage company strike-levels with options Below, One-Touch and Range with Fibonacci levels, to make options levels coincide with net levels, which the price usually reaches after bounces from 50% Fibo.
We considered the signals of Fibonacci binary options on timeframe Í4. In this case, the price needs form 4 to 12 hours to reach planned levels.
If you consider the signals on the chart of quotation H1, the expiration time will be 4-6 hours.
According to statistics of signals working off of Fibonacci binary options, such signals are worked out in three cases of four. That is, it is about 70 % of profitable entries. And if the profitability of options is 200%-300%, we have rather profitable trading system, which is used by many timeframes and financial assets.
We don’t forget the rules of money management, which tell us that we can use deposit volume in financial market trading. But our limit is maximum 5% from trading deposit. As all our previous efforts can be ruined by market’s extreme situations, which happen in binary options trading.
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