4 options binary trading systems that work
Then wait for confirmation from from stochastic and RSI. For a put signal the opposite is true. Stochastic should be pointing down following a bearish crossover and the RSI should be falling below the mid line or moving lower while below the mid line. Because the original strategy is meant for spot forex it has exits as well.
For binary traders these are pointless but we must take expiry into consideration. The signals given by this strategy are fairly strong and the asset moves into the money within a few bars.
When choosing expiry using the daily charts a 3 day to one week expiry is recommended for the strongest signals. On the 4H chart end of day, 3 day and up to one week expiry is what will work best, depending on the asset and strength of the signal. On the hourly charts end of the day and end of tomorrow are what you want to target.
This system is simple but its not a system, its a strategy. This strategy provides analysis and rules for entering trades but nothing about position size, money or risk management. That being said if you use some sound money management techniques you should be able to produce consistent positive results with this strategy.
I like that it uses multiple indicators to provide signal confirmations, I also like that the combination of indicators is easy to use. Applying trend analysis is a good way to weed out false, bad and weak signals. Keeping support and resistance in the equation is a good way to weed out good signals that have an unusually high probability of failure. To me, this is a sure path to failure but it seems to work here.
It is in effect a stochastic reading of an RSI and displays exactly as normal stochastic. If you use resistance and support lines, you can also get an idea if the price level will hold or if there may be other factors at work that can affect it. You can also cut out on losing trades by ignoring the signals that do not follow the current trend. One of the detriments of this system is the length of time to wait before being able to trade, up to 2 days or more to check if the trend is stable before trading.
There is also no guarantee that even after the wait you are not entering just before a retracement. This strategy does ignore the trends to a degree, but you should ensure that you only trade with the trends and not against them to avoid losses.
This strategy is easy to understand and use by anyone and it is easy to follow and remember the rules. Trading with the trend when using this strategy means you can get some good signals in the trend direction due to the SMA which is a trend identifying indicator. The RSI helps you confirm the information you need to trade. It is important when trading to try and keep things as simple and uncomplicated as possible. If you add in resistance and support lines you can improve the system and help you find your way to more profitable trades and fewer losses.
Or look at adding in a Stochastic Oscillator to help find the resistance and support areas easier. Having to wait for days to obtain a signal with this strategy may be off-putting to some traders, but there are ways to use this strategy for lower expires.