MACD is one of my favorite indicators for trading binary options. It can be used in a variety of ways to determine trend, reversals and trigger trading signals. One last thing, this article is a great jumping off point for those using MACD or any kind of oscillator.
There are links at the bottom taking you to other relevant articles that will help enhance the success of this strategy. Some of the good points about this strategy is that it is trend following, uses more than one indicator and is incredibly useful for binary options trading.
Not only that, because of the way MACD works and its applicability to multiple time frames this techniques can be used in longer time frames. This would be a hard question for me to answer since there are so many ways to use MACD to generate good signals. For James it was not so tough, he has been able to quantify neatly just what he believes is the best entry signal.
The two moving averages specified are 50 bar simple moving average and bar simple moving average. Together these indicators join to create signals with movements that last anywhere from 20 minutes to several hours. The set up is pretty simple and since it is on the 5 minute charts signals come pretty regularly.
The two moving averages are used to determine trend, trade type and as part of the signal. With that in mind traders are instructed to only trade according to this trend. Calls when it is bullish, puts when it is bearish. What this means is in a downtrend you will wait for prices to correct above the moving averages. When that happens a signal will be generated when the MACD oscillator is in the overbought side and makes a bearish crossover. This crossover and signal can be predicted with the MACD histogram.
If you look in the example provided the MACD histogram is making a nice divergence and foreshadowing the lower high and subsequent buy signal generated by this system. Expiry — In this example 5 minute cadlestick charts are being used and targeting a 20 to 30 minute expiry.
This equates to 4 or 5 candles so can be applied to any time frame. For example; Daily charts will be 4 days, one week or end of week expiry, 3O minutes charts would be 2 — 3 hours expiry. This system does not suck because it is an outstanding example and application of one of my favorite indicators.
This strategy not only uses my favorite indicators but also incorporates many of the features of a good strategy we here at BOTS have come to love. This strategy, as laid out, does not incorporate multiple time frame analysis but I think it would only benefit from it.
What it does have is a combination of well worn, trusted and often over looked indicators that incorporate trend and momentum to generate handy signals for traders of short duration binary options like dailies, hourlies or shorter.
I recommend this strategy to newbies, oldies, experienced, inexperienced, forex, commodity, stock, index and any other kind of binary options traders there are. Take hold of this strategy, love it, nurture it and I think in the end you will be net positive.
Binary Options That Suck. Please be noted that all information provided by Binary Options that Suck are based on our experience and do not mean to offend or accuse any broker with illegal matters. The words Suck, Scam, etc are based on the fact that these articles are written in a satirical and exaggerated form and therefore sometimes disconnected from reality. All information should be revised closely by readers and to be judged privately by each person.More...