This system makes use of numerous trading techniques such as the candlestick trend continuous signals. At first glance you might think that this is another one of those many unreliable trading strategies out there. But this is not the case with this strategy because it makes use of candles and trends. It even includes many other indicators such as moving averages and MACD.
Many of us know that one of the most effective ways of trading the financial markets is to trade with the market trend. To take full advantage of the characteristics of a trending market, this trading strategy uses the exponential moving averages (EMAs), stochastic oscillator and candlesticks to determine the opportune moment to enter the market. Since this strategy is supposed to be used for intraday trading especially for binaries with a 30 minute expiration time, the time frame for our chart will be 5 minutes.
CandleStick Binary Option Trend Strategy
The Candlestick Trend is a trading system for forex. This trend following system includes great techniques that you can conveniently use. It makes use of 2 time frames the 4H charts and daily charts. It also includes MACD and moving averages that comes with Meta traders Pattern Recognition Master for signal generation. You do not have to worry because its website has all downloads that you will need. You do not need to have a Meta Trader in order to benefit from the system. All you need to learn is to know how to identify candle patterns.
Trading Rules for CandleStick Binary Option Trend Strategy
To set up our trade, we will need to use EMAs with 21 period, 50 period and 100 period, and the stochastic oscillator on a candlestick price chart. Trading is only conducted when the market has satisfied the following conditions:
Call Option for up trend
Check that all the necessary conditions are fulfilled as such:
- The EMAs are drifting apart
- The entry candle is green (increasing) and closed above the 21 period EMA
- The stochastic indicator cross the 20 line from below
- The uptrend is reflected by the 21 period EMA
Put Option for down trend
If you are trading a downtrend market, the following conditions must be met:
- The EMAs are drifting apart
- The entry candle is red (decreasing) and closed below the 21 period EMA
- The stochastic indicator cross the 80 line from above
- The downtrend is reflected by the 21 period EMA
Advantages of CandleStick Binary Option Trend Strategy
- The Strategy is great because it makes use of great stuff in the trading system.
- It makes use of different time frames. It is also trend following and makes use varied indicators for signal confirmation.
- Moreover, it is very user friendly. The fact that it is trend following makes it easy to offer bearish and bullish signals.
- It is quite versatile and you can use it with just any index, commodity, currency pairs, stocks, and other tradable assets.
- Above all, it is simple to program to a trading platform such as Meta Trader.
Disadvantages of CandleStick Binary Option Trend Strategy
- It is not so good because it is not perfect. It is a great system but there are just some minute details that provide its imperfection.
- Firstly, it is not highly recommendable for newbies.
- Intermediate and amateur traders can fully use this strategy and earn more profits when used well.
- For these reasons, you need to read the fine lines.
- You need to know what you are expecting and know how to fully use this strategy.
- Moreover, you must have a strong foundation with charting using candles for your trades to be successful. Otherwise, you can have the correct software to do the job for you.
CandleStick Binary Option Trend Strategy- The bottom line
People trade with 30 minute expiry time is because we are only trading short term corrections in the market. An expiration time which is less than 30 minutes will not give the market enough time to react. On the other hand, an expiration time which is greater than 30 minutes can render our analysis totally obsolete. While this trading strategy can be used for any market, traders must be aware that we are actually trading a situation which statistically speaking occurs only 20% of the time. So the opportunity to apply this strategy will not be as frequent as one would like to think.
chart courtesy: Trading view