This strategy utilizes a daily chart, together with Fibonacci and Stochastic. These provide the signals at the heart of this digital options strategy. Overall, execution is simple, but some advanced techniques are incorporated. Traders not yet comfortable with Fibonacci and Stochastic are well-advised to use this strategy only after learning more about technical analysis tools and techniques.
This strategy makes use of the primary trend and uses daily charts to generate entry signals. Originally developed for Forex trading, this technique pairs well with digital options. It should help you identify various signals within daily charts, providing efficient long-term signals. It also will allow time for signals to get set. Considering that these signals are usually spot on, the success rate for this strategy when applied correctly is above average.
Step one is to identify the price trend. This can be accomplished using any asset and chart. Once the trend has been identified, start looking for continuation signals. This task can be completed using Fibonacci retracements and Stochastic crossovers. These are going to highlight your entry points. If you are not comfortable with Fibonacci, support and resistance lines or moving averages can be used instead.
In any trend there will be times when the price retracts or bounces around. When this happens, use retracement lines to determine areas in which the trend may start back. Afterward, use price patterns and stochastic crossovers to obtain the entry signals, continuing to trade along with the trend. There are no designated expiry selection rules, but it does seem to be somewhat more effective with longer expiries. Do be sure that your technical analysis selections match the expiry you plan to select.
This strategy delivers efficient signals and is excellent for traders who like longer expiry periods. Trend monitoring is widely recognized as an effective technique and the daily charts offer you a clearer perspective than smaller time-frame charts. This strategy should deliver the opportunity to trade the same asset several times in succession with confidence. Once you complete your first trade and the price starts to shift as expected, you can trade again.
This strategy does require some patience. Signals may not appear frequently. Risk increases if you trade in advance of the appropriate setup. High volume traders likely will not fall in love with this strategy, but it can be used in addition to other strategies. Some understanding of technical analysis and the tools used to accomplish it is required. However, this digital options strategy is open to all traders who know how to use just a few key charting tools.