The set up with this binary options strategy is relatively simple. Since it utilizes 5 minute charts the trade signals show up frequently enough to please those who like to maintain a higher trade volume. A pair of moving averages will determine the asset price trend and trade type. The trend is pinpointed by the positioning of the two moving averages. Whenever the short term 50-bar is positioned higher than the long term 100-bar the trend is considered to be bullish. Whenever the short term 50-bar is underneath the long term 100-bar the trend is considered to be bearish.
With both of these set ups in mind, you’ll simply trade along with the trend. Enter into Call positions when the market is bullish and Put positions when the market is bearish. A signal will be produced whenever MACD happens to be overbought or oversold and crosses while asset prices have pulled back past the moving averages. For a downtrend you’ll wait for asset prices to make their correction above the MA’s. When this occurs a signal is going to be produced when the MACD oscillator is positioned in the overbought area and completes a bearish crossover. Both the crossover and signal can be forecast using the MACD histogram.
This binary options strategy is an excellent example of one which utilizes a reliable indicator. It also includes a number of features that make for a strong strategy. It does not, however, make use of analysis for multiple time frames. With that said, it does include several trusted and frequently overlooked indicators that blend price trend and price momentum in order to produce signals for shorter expiry times such as one day, one hour, or even shorter. This solid MACD entry can be used by traders of all skill levels.