Strategy for Binary Options - Scalping «Price action»
Today we look at a simple trading strategy without the indicators, which is based on scalping of binary options. At the same time, we do not need to have any serious knowledge and skills in trading. Since this trading strategy is very simple to understand.
The technology is based on an assessment of the quotation charts in 4 timeframes. We can trade on a web terminal. At the same time, the assessment of the current market situation we will carry out with the help of the trading terminal MetaTrader4 from binary options broker GrandCapital.
You can get acquainted with the binary options brokers that offer the technologically advanced platform here.
Note that trade on a pure graph based only on price changes relates this strategy to Price action, and the application of the scalping principle brings us a good rate of transactions and a good profit.
This is a multi-currency strategy and can be used on any financial assets - currency pairs, commodities, stocks or indices.
Scalping Strategy - get started to trade
For example, let's describe the binary actions deal based on the signals that we get simultaneously from 4-timeframes. To do this, we need to open timeframes M5, M15, M30, as well as H1 in the terminal MT4.
So, in order to get a signal to make the deal in binary options:
- look at the closed candles on the opened four timeframes: M5, M15, M30, and H1;
- if on the graphs of these four timeframes the last candle is bullish (when the opening price is below the closing price) - then buy Call-option;
- if on the graphs of these four timeframes the last candle is bearish ( the opening price was higher than the closing price) - then sell the Put-option;
So, for the trade - open four of the above mentioned graphs with one asset. According to the recommendations of the author, the situation with the price we have to evaluate by four timeframes: M5 - which gives us a characterization of the current price behavior, M15 - shows the medium-term trends in the financial instrument, as well as M30, H1 - shows more long-term plans of the trading instrument.
Our task is to see one and the same trend in these 4 windows, namely, when the candles in the prices charts will close in the same direction.
If all the rules executed (for example, if on the graphs with four timeframes the last candles are bearish), open the web terminal, which we use in trading binary options, and make a deal - Put-option at the cost of the current prices.
However, if one of the 4 candles closed with another trend, continue to expect the correct trend.
In general, we trade on M5 timeframe, and all the other timeframes act as filters for the entrance to the purchase or sale.
In this trading strategy other options were not tested. If you want to experiment, it is more likely that under the specified option ONE-TOUCH option would suit. Start your testing with this type of option.
TERMS of EXPIRATION
We would like to note that this strategy is well suited for classic trading options, for which it does not matter how much the price will move in points, as well as for the "designer" options that can help us make a custom setting of the trade. However, counting the time of expiration, pay attention to the fact that you are actually trading on the information you get from a five-minute chart. So, for the correct trading you need to put at least 10-15 minutes as the dates of expiration, so that the price can manage to take some distance it needs to make a profit.
In addition, we want to please the traders and report that this trade can be interpreted on other timeframes that will allow it to be used at other options with longer-term expiration dates.
Besides the above-mentioned time intervals, you can trade on M15. Then, for filtering the transactions we need to open the graphs M30, H1 and H4. Medium-term trading can be carried out on the graph H1 and filtering the signals can be done on the graphs H4, D1 and W1. At the same time, trade on the specified timeframes will not be less profitable. Just due to the fact that we sell directly from the information received from the older timeframes, we will spend less time to trade than if we were constantly near the terminal trading on M5. However, do not forget to choose for each timeframe the expiration dates. The option "designer" helps you with this.
Of course, we should not forget that the quality of trade can often depend on the brokerage company that can provide a trader with good trading platform and correct quotes.
The strategy gives not a bad amount of profitable entries, the overall ratio of profitable and unprofitable trades is 4 to 1. That is, on 4 profitable deals comes just one losing. This allows you to increase the size of the entry order.
Taking into account that losing trades in the system are less than profitable, it allows you to increase the size of the minimum rate of up to 5% of the deposit.
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