This binary options strategy is a standard trend following strategy that may be used by traders of all skill levels. It makes use of more than one type of analysis and has been extensively tested. The strategy uses triple time-frame analysis for the purpose of short-term trading. Signals are derived from 5-minute charts and are backed by underlying long-term price trends. The three time frames are: 4-hour, 1-hour and 5 minutes. The single indicator is the 60-bar SMA (simple moving average).
The strategy functions by recording asset price movement within the three time-frames. The first being your 4-hour chart. When the asset prices within this chart are higher than the SMA, the underlying price trend is going to be bullish. Your next move will be to the 1-hour chart for verification. There you would look to see if prices are again higher than the SMA. If so, move on to the 5-minute chart. If the asset prices are again showing that the underlying trend is bullish, then it’s time to trade.
But what if the prices are under the SMA?
Then you’ll need to hold out and wait for them to move over. The crossover will provide yet another buy signal. The same applies in reverse for bear-market trades. If the 4-hour chart shows bearish conditions, check the 1-hour chart for verification. If validated, look to the 5-minute chart and watch for a Put option purchase signal.
This strategy supplies precise information, employs multiple time-frames, and wipes out conflicting signals. It is excellent for short-term binary options trades since it works by using multiple indicators. Of course no strategy is completely fool proof, this one included. Given that it begins with the 4-hour chart, there exists a possibility that stronger trends could dominate so pay attention to any signals displayed within the day or week charts. This strategy is an easy but efficient way to trade with short-term binaries and should be a suitable strategy option for novice traders.