New vfxAlert: follow the market with "Trends" indicator
- VFX Blog
- For beginners
Trend trading remains the best option to make money on binary options. Trading will be more reliable when a trend in one direction is visible on multiple timeframes. The "Trends" indicator of the vfxAlert program will help you quickly assess the situation and find the moment for an option.
There are three types of trend:
- Uptrend or «bullish». Each next price maximum (top) and minimum (trough) is higher than the previous one.
- Downtrend or «bearish». Each next max/min is lower than the previous one.
- Sideways. The max/min is approximately at the same level. You can open binary options only on a wide flat, when the distance between trend lines is from 3-4 candles of the working timeframe. You can open deals such as "Boundary Out/In", "Stays Between/Goes Outside".
The method of determining the trend three max/min is considered classic, and is present in all learn binary option for newbie’s. There is a problem: when the third max/min appears, most of the movement is passed, a U-turn or flat is close. You can make a mistake with expiration even on long timeframes! There is a problem: when the third max/min appears, most of the movement is passed, a nearby or flat is close. You can make a mistake with expiration even on long timeframes!
On M1, the price goes through 20-30 points without the appearance of a new extreme, when you can open several profitable options with 3-5 minutes. If you trade on the "classic" skipped good entry points, you need a different trend exact binary option strategy.
«Trends» uses the results of the last 20 completed signals for each timeframe. If there are more profitable CALL-options then PUT goes uptrend, the opposite situation is downtrend. If the number of profits is with 50/50 - flat market.
What does «Trend Power»?
"Trends "similar to the signals of vfxAlert displays the value of balance between CALL/PUT profit is shifted. There is a feature here that must be taken into account when planning the next binary option.
Let's remember how the Stochastic oscillator works: the exit from overbought/oversold zones is a strong binary option trading signals of the beginning of a reversal, you can open a trade even without additional confirmation. It works at the intersection of the MA, the break of support/resistance, etc.
The "Power" value for trends doesn't work that way. For example, about "Strong" in the figure, you can say this: "on the last 20 signals in the PUT profit. For what period of time they appeared we do not know, maybe the trend ends, it is better to wait."
«Weak» may indicate the beginning of a new trend, when sellers/buyers are just beginning to change the balance of power and statistics do not keep up with them.
If «Trends» in binary option strategy is used as the main indicator, look for an entry point at the Middle values. The moment of the reversal has passed, the movement is gaining strength and there is still enough time to make a decision and correctly calculate the expiration. This is only recommendation, the final decision remains with the trader!
How to trade?
«The same trend direction on different timeframes increases the probability of its continuation and the reliability of the entry point» - one of the basic principles of technical analysis. We will also use «Trends»: quickly assess the situation on the lower and higher timeframes relative to the current one, and then open a trade in the direction of the main movement.
One of the most popular options is the multiframe strategy "Three Elder Screens". We look at how it works on Litecoin:
The technique works on all assets, including cryptocurrencies and on the M1 timeframe as shown in video. First, we look at the coincidence of the trend directions, starting from the higher timeframe to the lower one, confirmation from the binary signal software vfxAlert. It is good when there is “Middle Trend” everywhere, but this is not the main thing. Special attention to expiration: for a consistently positive result, it should be at least 3-5 minutes.
Recommendations about use …
1. We always follow money management. When the indicator for all timeframes shows a strong trend in one direction, binary option trader can succumb to the excitement of profit and start opening additional options in the expectation of continuing movement. The market always punishes such "optimists" with a quick reversal. We get a significant loss or even completely lose the deposit!
2. The "Trends" indicator, like any other indicator, cannot be the only factor for opening an option. Its data should always be confirmed by vfxAlert signals and other technical analysis tools: crossing the Moving Average, overbought/oversold on oscillators. It is recommended to track the dynamics of changes in the volume and balance of forces of Bull Power/Bear Power.
3. Before opening a trade on "Trends", do not forget to visually check the current situation. It works according to historical data, so there will always be a delay, it can not "see" the market completely:
- the appearance of a reversal candlestick patterns,
- price approach to a strong support/resistance level,
- local max/min from which a rollback or reversal can start,
This can only be done by a person for the right decision: open an option now or wait for the next binary trading signal.
4. The longer the sideways movement in the market, the higher the probability of a strong trend after its completion. In such cases, you can open trades at the first sign of a range breakout, changes in the "Trends" values and strong live trading signals from vfxAlert;
5. During the publication of important fundamental news and statistics, we do not open options 30 minutes before the news and 30 minutes after the publication; cautious traders can close current deals. To control the events, we use the economic calendar included in the all popular binary trading platform!
Let's summarize. Profit from trend trading depends on the accuracy of the analysis and the correct expiration time - at least 3-5 periods of the timeframe. Therefore, you need to look at how binary options signals work on a demo account before using it for real trades.