Wednesday, November 6th, 2013 by Tim Lanoue
The aim of today’s article is to give novice or experienced binary options traders a strategy that I have had some great success with lately. Oftentimes if I run across a strategy like this and have been seeing the success I have I would not share it for free to the public but I figured I may as well help you to the best of my ability. With that being said we are going to discuss my advance binary options trend trading strategy.
How does Trend Trading Strategy Work?
As many of you may know there are three types of trends associated with any asset in the online trading world. We have a bearish trend which simple means a down trend while on the other hand we have a bullish trend which signifies an uptrend. The last type of trend there is would be a neutral trend, where the price of an asset is neither increasing nor decreasing much. Moving forward, we can create a trend line like seen in the picture below. We can create one straight line on the top of the asset and under the belly of the asset. The purpose of these trends lines is to help point out significant support and resistance levels of an asset. These trend lines also make it easier to spot new highs and lows during a short trend allowing more opportunities for trades to be made. Once a trend line is broken or reflected off we can expect a strong reversal in the assets direction therefore creating another trading opportunity for us.
Setting up the trend trading strategy is relatively simple and requires little to no time. First off you will need a charting solution like Meta Trader 4 and you can where you can watch the live feed of an asset. To create a free account with Meta Trader, you must enter your username and password from a Forex Demo Account. From there on we put 3 exponential moving average lines set at a period of 6, 9 and 14. Next we add our Bollinger Bands® indicator to our chart and finish off by adding a straight line over the top of the asset and under the asset like seen above. As seen in the picture above we have four instances where the Eur/Usd asset bounced off or break our trend line and reversed in the opposite direction. However, we need to wait for atleast one confirmation to occur and that is that our reflected or broken candles have to be within or partially within our Bollinger Bands® cloud, if they are then we are good to place our trade. Lastly, if any of our EMA lines are running through our candle it acts as a stronger indicator that the asset is likely to reverse in the other opposite direction.
This strategy is simple and easy to use which is why it is probably one of the better ones I have used. Not much is needed for a good trading signal to be generated and there are many confirmations that the signal you are receiving is likely to happen. Trend trading can be very effective when used wisely so if you are a trend trader then this strategy is for you! If you have any questions or comments go ahead and leave one below.