Wednesday, August 12th, 2015 by Snir Yamin
In this article I want to share with you my effective Binary Options Support and Resistance trading pattern. This is indeed, a very powerful trading pattern that can work for beginners, if this information is new to you please post your questions below and make sure to test my pattern on a demo account.
To apply this trading pattern in the most accurate way, we will use the following indicators on the 15 min chart:
- 365 EMA (exponential moving average)
- 180 EMA
- Bollinger Bands (default setting of 20, 2.0)
The first step in this trading pattern is to identify the overall trend of the current asset. In order to do this, we’re using the 365 (blue) and 180 (red) EMA’s. If the shorter EMA (180-red) is below the longer EMA (365-blue), the currency is on a downtrend. Vice Versa with uptrend – If the 180 EMA is above the 365 EMA, the currency pair is currently up trending.
The seconds step is to wait for the price to cross the lower or the upper band of the Bollinger Bands. In a downtrend we want to see a cross of the upper band from bottom to top, and in an uptrend we want to see a cross of the lower band from top to bottom. Once the price crosses the band, we will draw Horizontal line from the lowest/highest point of the crossing candle (depends on the current trend).
On a downtrend we will draw our horizontal line from the highest point of the candle that crosses the upper band.
On an uptrend we will draw our horizontal line from the lowest point of the candle that crosses the lower band.
The third step is to wait for at least 3 bounces of our horizontal line. We want to see the price testing our line but not closing below it (in case of a support) or above it (in case of a resistance) at any given point. On the 3rd bounce of our support/resistance line we will open a Call (on support) or Put (on resistance) to expire at the close of the following 15 min candle.
As you can see, EUR/GBP is currently up trending according to the EMA’s (180 above 365). Around 8:00pm EST the price crossed the lower Bollinger band, this will be our place to draw the horizontal line from. Then, price tested this level once and closed above it. Then tested it twice and closed above it again. On the 3rd touch of this level we opened a Call option to expire at the close of the following 15 min candle. As you can see this position ended up deep In the Money (ITM).
As you can see, GBP/USD is currently down trending according to the EMA’s (180 below 365). Around 4:00am EST the price crossed the upper Bollinger Band, this will be our place to draw the horizontal line from. Then, price tested this level once and closed below it. Then tested it twice and closed below it again. On the 3rd touch of this level we opened a Put option to expire at the close of the following 15 min candle. As you can see this position ended up deep In the Money (ITM).
Who is the author of this article, Snir Yamin?
Snir is one of top trading admins at Mike’s FB signals group. He hosts webinars, teaches binary options and provides our members with daily signals. With a consistent performance of over %75 ITM Snir is a leading trader and definitely someone you want to learn from and follow. Don’t hesitate to share your questions or comments below.