This digital options strategy is founded on technical analysis, with the focus being on support and resistance lines. The strategy is quite simple, since there are no complex indicators involved, but you will need to know how to draw support and resistance lines within your preferred analysis chart. If you can do this, then the prevailing price action should be quite clear. S&R (support and resistance) lines mark the entry points and signals are based on candles. Any currency pair and expiry time period can be used, but the strategy does work better with currency pairs that are offer higher liquidity.
Signals are easy to come by when using this binary options strategy. Just wait for the asset price to hit either the support or resistance line. Once this happens, wait for signal of price reversal and then trade. Opt for a Call trade is the movement is going away from the level of support, or a Put if the movement is going away from level of resistance. The signal can last for up to 50 pips, so the expiry time should be selected by just how active your selected currency pair actually is.
One of the benefits of this strategy is that it is simple enough for beginner level traders that know how to read technical charts. It does include many of the features that make for a solid digital options strategy. Another benefit is the ability to select from different expiry times and different currency pairs. The simplicity, however, could be a problem for beginning traders who are not yet comfortable with using charts or identifying support and resistance lines. There may also be some patience required when watching for the reversal candle.
Another potential drawback is that this strategy does not take into account price trends or the role that market sentiment is playing on current market conditions. Potential price breakouts are also not considered. Candle reversal is the only indicator to tell you when to trade. In addition to the aforementioned required patience, if you walk away, a signal to trade could be missed. This would of course be quite frustrating.
In general, this digital options strategy is excellent for novice traders attempting to learn more about price action while generating profits. The principles are sound and basic analysis is being taught while using this strategy. This may not be the most potent strategy available, but if you apply the basic concepts together with fundamental analysis, you should be able to generate a clear picture of the upcoming direction of asset price movement.