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Home Rating strategies “Multi – Stochastic” binary options long-term trading

“Multi – Stochastic” binary options long-term trading

Strategy characteristics

Risk
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Profit
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Suitable options: classic binary options, One-touch Choose a broker
Expiry time: 3 days, 6 days

The Stochastic Oscillator has always been considered the most informative and quick indicator of all currently known technical analysis tools. If all the other indicators are "lagging" and show the entry points when it is already necessary to get out of position, the Stochastic is always the fastest and trader can enter the market based on its signals without fear that the price movement is about to end.

Given the above, two Stochastic oscillators that confirm each other signals are used in our strategy allowing you to enter the market more quickly and efficiently.

TRADING RULES

In order to start trading with the system, you need to get handy tools for technical analysis, namely, the MT4 platform, which you can download from this link.

Also, you need an archive with indicators and the system template that you can get from here. If you do not know how to install indicators to the terminal, you should then read this article.

Once everything is in place and the system template is applied to the chart, your traded instrument will look like this.

We use the following indicators in the system:

  • Stochastic Oscillator 14/5/5 – shows the overall trend and serves as the side of binary options contract execution filter;
  • Stochastic Oscillator 9/5/5 – shows local trends direction (including pull-backs and corrections);
  • Williams Percent Range – oscillator, that points the strength and direction of middle-term price momentum;
  • НМА20 – indicates the direction of trend and serves as a filter for the direction of market entering.
Indicator system signals for entering long position:
  • Stochastic Oscillator 14/5/5 – shows the upward intersection. The given intersection must appear below the 50 level providing a room for a potential price move;
  • Stochastic Oscillator 9/5/5 – is in the oversold zone or was there at the previous bar;
  • Williams Percent Range – intersected its own scale center level to the upside;
  • НМА20 – is colored blue.
Once all of the above signals emerged, we enter the position by buying the Call-option.

Indicator system signals for entering sales position:

  • Stochastic Oscillator 14/5/5 – shows the downward intersection. The given intersection must appear above the 50 level providing a room for a potential price move;
  • Stochastic Oscillator 9/5/5 – is in the overbought zone or was there at the previous bar;
  • Williams Percent Range – – intersected its own scale center level to the downside,
  • НМА20 – is colored brown.
Once all of the above signals emerged, we enter the position with the Put-option


As you can see, if the trade is executed right after the complex of the mentioned signals occurrence then the market will move in the desired direction for a rather long time.

The advantages of the system

  • trading is done with the D1 chart, which does not take much time;
  • a large deposit is not required;
  • the system is profitable and stable.

System’s disadvantages

  • the trading does not like flat market;
  • the number of trades is low.

APPROPRIATE OPTIONS

Classic binary options are appropriate for the named trading system. It does not matter how many points will the price move after executing a trade to make profit, however the given option is not very profitable (up to 85% payout for each positive trade). The One-touch option is also appropriate for this trading system. We need the strike level to be reached to make profit, however we are tempted by its peculiar greater profitability, which is up to 400% -500% per trade.

EXPIRATION TIMES

We choose the following times as expiration terms:

  • not less than 2-3 days for classic binary options.
  • we set 6-10 days for the One-Touch options, because that is the period needed to reach the contract’s preset strike level.

PROFITABILITY

As already mentioned above, the profitability of the system depends on the type of option we will be trading. If you want a more impulsive (as much as it is possible with long-term contracts) trading, then you should better choose classic binary options, the profit of which, unfortunately, only reaches a maximum of 85%. You will then with the lot of $100 be receiving net profit of $220 from each four trades with one obligatory losing trade.

If you are a supporter of a more long-term trading, then you should use One-Touch options, and your expectations will be rewarded with the payout rate of about 400% -500% for 1 trade. Thus, as a result of a series of trades with the 4:2 ratio (4 profitable to 2 losing) and the initial lot of $ 100 you will get the net profit of $ 1800.

MONEY MANAGEMENT

We use only 3% of deposit size for trading. In this case, it is better if your broker is not a greedy company and insures your risks with subsequent recovery of at least 10% of the loss. In that case, the lot size of 4% can be used. Only this way you will be always surviving any temporary difficulties created by the flat type market.



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