Short term strategies in binary options are somehow nicer and sound quieter in the understanding of beginners. After just 1 to 15 minutes the result is already known, less nervous expectations, less risk, once it is clear if the strategy worked or not, and the trend in the long term is difficult to predict. But not so simple. Often in the short term, the trend does not give accurate results: the main movement may be a correction and Vice versa. I recommend to pay attention to the strategy based on the analysis of both a minute and daily charts.
This medium-term strategy for options involves the analysis of the D1 and W1. Its application is suitable for those who are not chasing a quick profit and tries to minimize their risks.
The medium-term strategy for options
- asset — liquidity of the currency pair EUR/USD. For other currency pairs strategy is also applicable, but you need to find the optimal settings of the indicator;
- money management takes into account the risk for each open option, 3-4% of the Deposit.
Used indicators – three simple moving:
- for W1 timeframe: period 4 (red), period 8 (blue), 40 period (dotted line, green);
- for D1 timeframe: period 5 (red), 20 (blue), a period of 80 (dotted line, green).
Insert data to the terminal, set the levels of support and resistance, draw trend lines, using price highs and lows.
The principles of open positions. First, simultaneously analyze both graphs (daily and weekly). It is important that in both graphs the lines SMA (moving) at the same time pointing up or down, moving averages (4) and (8) of the weekly chart should have the same orientation as the moving (20) on the daily one. Position should not be opened immediately: as soon as you receive the first signal, wait for confirming signals (the medium-term strategy for options does not require a quick decision).
- moving (5) on the daily chart is directed to the opposite side of the chart or moving horizontally, and then turning again in the direction of the trend;
- moving (20) was directed against trend, or moved horizontally. The price crossed the moving and fixed above MA (a Put option) or below (Call option).
The first figure shows the trend going up, the second image (enlarged plot of the upward trend) shows a convenient point to enter the market. On the daily chart anticipate the moving average of red, and its movement up. This medium-term strategy for options provides individual selection of expiry times individually for each asset.
Summary. There are a lot of strategies that are based on moving averages, but most of them are more applicable in the Forex market, because by themselves, moving averages do not always give accurate results on a short timeframe. Forex additionally stochastic oscillator showing overbought and oversold, but in binary options it may help only in medium-term strategies. Willing to take the time and strive for accuracy and not for profit? Then moving averages are just for you!