«Money Flows Index» long-term classic trading system for binary options
Money is a decisive factor in each and everyone’s life. Whoever speaks about the dangers of money, he takes the purse and goes to the store to purchase goods right after his tedious sermon. Thus, the money will always remain the most popular factor in our lives. Of course, if we are not going to migrate to the "Island of the sun" described in the book by Tomaso Campanella, where there is no money and all things even the toothbrush are common.
While idealists are talking about the dangers of money, we will learn how to earn oit especially as long as we have such trading system as "Money Flow Index", which is suitable for intra-, medium- and long-term trading.
To get the workspace ready we need the MT4 terminal, with the help of which we will be able to track several indicators. The terminal is available for download here, and this address will provide you with an article containing instructions for the terminal.
So we now face the MT4 trading terminal and the trading system template, available for download here, applied to it. The whole quote chart space will look like this.
Only 2 indicators will be used in this strategy, both included in the standard MT4 distribution kit, namely:
- MACD – the one that shows the direction of the trend, which is bearish or bullish;
- MFI (Money Flow Index), the one that gave a name to our “Money Flow Index” trading system, which serves as an oscillator showing the predominance of buying or selling on the assets market.
- MACD, acting as a filter and indicating the general direction of the trend, is above its own zero line, indicating the bullish nature of the trend;
- MFI has shown the buying orders predominance on the market.
- MACD, acting as a filter and indicating the general direction of the trend, is below its own zero line, indicating the bearish nature of the trend;
- MFI has shown the sell orders predominance on the market.
At the screenshots above you can see that the system is good not only for trends, but for the flat market as well, which unifies and makes it even more valuable. If you watch the indicators real-time behavior it can be seen that the MFI is limiting us in entering incorrect trades when the MACD has already given a signal to enter and vice versa, that the MACD filters the MFI indicator signals not letting to enter wrong positions.
Trading strategy advantages:
- Trading is conducted on the charts of large intervals of not less than H4, D1 preferably, for which rapid changes in movement direction are not common;
- Trading does not take much time - just a few minutes a day when trading with D1 chart and only 1 hour in general when trading with H4 chart;
- There is no need for a large deposit.
Trading strategy disadvantages:
- a fewer amount of trades
The classic binary options and One-Touch options that require the price to reach the predetermined strike level are the best for trading this strategy.
Other options will also fit in this strategy but you will need to test the signals provided for them by the system by yourselves. You do not know how to test trading strategies? Read here.
If we trade with the D1 chart, then we need to set expiration dates for at least 4-6 days for classical binary options.
When trading One-Touch options, it is necessary to extend the expiration time for 7 to 10 days. That is the time needed for the price to break through the levels specified in the terms of contract.
Accuracy of the system’s signals, as seen on the screenshots and as our system showed when tested, is not less than 65%. That is, we get only one loss trade for each 3-4 trades. In this case, flat market results deteriorate while trend market results are improved which is typical for almost all trading systems. At the same time, the "money flow index" system has shown excellent results over longer terms, which have increased the real deposit size for 500% in half a year (2 options were used in trading at the same time: classic binary option and One-touch).
We use the trading lot size of not more than 4% of the deposit. Surely in case your deposit is 300$ then the trade size will be only 8$ but you should not worry as it may take quite a little time till you will double the deposit and increase the lot size twice. In a couple of years your trading account will be unrecognizable and “pot-bellied”.
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