When I first attempted to create my own strategy my goal was to develop a system that could eliminate doubts and indecision out of the equation. I needed confirmation, a solid strategy with simple rules that could be followed and traded mechanically. Today, with months of training, I have the skills to fully benefit from the great trading opportunities it offers. If you are a newbie, you can follow the rules and trade this strategy mechanically until you acquire the skills necessary to understand the reasons behind the rules.
Hence I can recommend this strategy to both newbies and more experienced traders! Add 3 exponential moving averages with the following periods: Add 5, 3, 3 Stochastic Oscillator with the following levels: Add RSI with value 4 and the following levels: The accuracy of these lines are very high.
I advise newbie traders to not trade near these lines until they understand price action well, specially the pivot-line. You can learn about the PivotCalc here. First you need to confirm the direction of the trend. The moving averages are the very useful tools for this task. Check to see if price is stepping down and is under the and EMA, if that is the case look for lower highs and lower lows.
If price is stepping up it should be creating higher highs and higher lows above the and EMA. The two vertical red lines show the lower highs at overbought areas on the minute chart. Notice that these two highs are also under the and the 50EMA. These are good locations for Put-Options. You can actually find two more Put opportunities if you look carefully. Notice that the distance between the 50 and EMA is becoming narrower on the right side in the picture and Doji-candles are forming.
First approach is for the newbies who want to trade this mechanically until they become skilled. Stochastic and RSI are about to touch overbought levels. You must let the current bullish minute candle to finish and confirm that the retracement is over. In order to confirm the bullish move is over, change to the 5-minute chart and see if a 5-minute bearish candle forms. But this time you are looking at the 5-minute timeframe. Notice how the candles are closing lower and lower in circle.
This indicates that the high is likely to be over. Pay attention to the overbought areas too. The Stochastic and the RSI are now crossing the overbought levels and are heading down. The entry is after this 5-minute bearish candle is closed. Depending on the market volatility choose between minute or minute expiry. Remember though, the M15 and the M5 still have to be overbought! Notice how price resisted at the second golden line from bottom to top. Notice the pin-bars indicating price was forced down.
So basically, using price action, there is no need to wait for a full 5-minute candle to finish in the direction you want to trade.
Price failing to continue up confirmed the retracement was over and thus gave you a better entry. You can apply the same methods on Call Options, just look for higher highs and higher lows as I mentioned earlier.
Not so surprisingly, this strategy does not work in ANY market condition. The main issue is being able to patiently wait for all of the correct market conditions to line up for you. Furthermore, it can be quite difficult for beginners to find the best entries.
This strategy provides with enough confirmations to induce the trader to take a trade. The rules are simple to follow. This strategy also teaches you trend identification and lets you practice on your price action skills! Whether this strategy sucks or not depends entirely on how well you understand the reasons behind the rules of this strategy.
Try it out on a demo account first. You can benefit from my trading diary and the forum thread I started about this strategy. Some of your questions might have been answered already in these threads! 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...