Trading classic «Pendulum» binary options
Let us consider the simple trading strategy, which is designed for classic binary options and is applicable to other types of option trading. However, its simplicity only confirms the truth of the “Genius is simplicity” proverb. At the same time, for all its simplicity, the system is quite profitable and capable of generating a regular income for its traders.
We will consider trading the EURJPY currency pair at D1 timeframe, which is one of the most volatile pairs of the currency market. So, let us proceed to the rules of trading.
To get yourself ready for trading you need to download and install MT4 terminal to your personal computer, the one you would use to evaluate signals provided by the system for classic “Pendulum” binary options. We will be trading with the web terminal of binary options broker. Haven’t you finally decided on the broker to choose? Then you need to check our company’s very best brokers rating.
As soon as your personal computer has the MT4 platform set up, go on installing indicators and the template from this archive, according to the requirements provided in the given article.
Well, as a result of the above actions, our terminal will look like this
As you can see, the chart took a quite colorful and more predictable shape. At the same time, for the given trading system we are going to use the following technical indicators:
- BB Magnified Market Price - informative indicator that shows us the current price quotes of the financial asset;
- Binary Breaker Lines - an indicator coloring candles of the charts with decrease and increase colors;
- Binary Alert Arrows – an indicator placing visual arrows to specify the local levels;
- BB trigger - an indicator that is located in the "basement" window in the bottom of the quotes chart, indicating the nature of price movements, that is, acts as an oscillator.
- Binary Breaker Lines has colored the chart candle into blue, which indicates that the local uptrend is emerging;
- there is an arrow on the chart pointing upwards, which means that the price has reached a lower level, at which the Zig-Zag indicator would have drawn a new bottom;
- BB trigger has shown the intersection of main and signal lines to the upside.
Selling signal occurs when:
- Binary Breaker Lines has colored the chart candle into red, which indicates that the local downtrend is emerging;
- there is an arrow on the chart pointing downwards, which means that the price has reached a higher level, at which the Zig-Zag indicator would have drawn a new top;
- BB trigger has shown the intersection of main and signal lines to the downside.
As you can see, the signals are quite clear and they cannot be qualified as something different, which makes the system easy to understand and to use even for beginners.
When trading the system for classic “Pendulum” binary options, One-touch, Range, Below options may also be used besides the specified type. Thus, if in the previous case the minor deviation of the price in the right direction was enough for us, then for the latter options we should expect quite significant price deviations from the entry point, as there is a condition to achieve the preset strike levels by the price.
We need to use expiration times of not less than 2 days for classic binary options.
To profit with the One-touch, Range, Below options we need to set expiration times to not less than 7 days or even to 2 weeks.
In this case, when there is a new signal for the opposite direction, we need to diversify our risks and buy an option due to the reappeared direction. In this case, one of the options makes a profit of 300% -400% according to the payout, and the second one generates a loss of 100%. That allows us to always be positive.
The given trading system provides a pretty good profitability resulting in the deposit growth. The signals positive response rate is not less than 60% and is really getting consolidated profit out of the negative zone. In case you have executed 4 trades then only 1 will be closed with a loss meaning that investment of 100$ (with 80% profitability rate), will generate a minimum profit of 320$ and a loss of 100$ resulting in 220$ of net profit. If the options provide 400% profitability, then there is 1600$ profit with just 100$ loss.
Every trading strategy does always have its limit for the funds to be used for one trade. In this case, the limit for the given system is 3%, which will always protect your trading deposit from significant losses caused by a series of loss-generating trades.
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