The Euro / Dollar currency pair is among the more popular assets selected by traders when trading digital options. Among the many reasons as to why this asset is so often chosen is its liquidity. This currency pair is bought and sold in high volume, at all hours. With such exceptionally high trade volume, chances to make money from this pairing occur each and every day. This is why itâ€™s smart to know one or more strategies for this pair.
This strategy calls for the selection of 30-minute charts within your Forex chart of choice, combined with MACD and Parabolic SAR indicators. The MACD is used to identify changes in price direction, price trend length, price movement traction and overall strength of any trend. Parabolic SAR is used to identify optimal entry and exit points in the marketplace. A simple summary would be that if the asset price shifts underneath the indicator, go short (select a short expiry time). When movement is above the indicator, go long (select a longer expiry time).
In trying to predict that the Euro / Dollar is growing to be bullish, look for the currencies to be higher than the Parabolic SAR, along with the MACD switching from negative to positive. The opposite movement denotes a bearish shift, with the pair trading underneath the Parabolic SAR and the MACD switching from positive to negative. When you identify the dominating market condition, base your digital options trade on whether it is bullish or bearish.
You could choose opt for basic Put/Call positions, but the recommendation for this specific strategy is One Touch options. For these trades, be sure to determine the resistance level before concerning yourself with the entry price. When you have made this determination, check to see that the entry price is underneath this level and stands strong chance of being able to touch the target price. Simply reverse the process in order to use this strategy under bearish market conditions.
This digital options strategy does require the use of a reliable technical analysis chart, combined with the ability to read this chart. New traders are advised to first master chart basics before trying to use chart-based strategies such as this Euro / Dollar forecast method.