ADX - profit from market dynamics

• VFX Blog
• Strategies

Trading with the trend remains the most profitable strategy, how to make money on binary options. It is necessary to determine not only the direction but also the strength of the movement. The indicator ADX will help you to open the option correctly.

Strategy characteristics

Type: Trend.

Timeframe: Any in the range M1-M5. In our case, M1 is used, but with an increasing period of analysis, the accuracy of the signal an increasing.

Trading asset: Any currency pair. The main requirement is a fixed (2-3 points) spread and no hidden fees.

Trading time:  All Forex trading sessions.

Percentage premium option: Not less than 70-75%.

Used indicators

The strategy uses two technical indicators.

Two exponentials (EMA) moving averages with periods of 50. Trend indicators by which we determine the opening point of the option. The strategy is not intended for trading during flat periods. We trade only if the range for binary options free signals is at least 15-25 points!

• ADX (Average Directional Movement Index). Confirmation of the presence, direction and strength of the trend. The direction is determined by the +DI and —DI lines, and the ADX line is an indicator of the strength of the trend. If +DI is above —DI, the market an uptrend. For a downtrend, we look at opposite conditions in options signals service.

The indicator is not available on all binary options sites. In our case, this is the Binary.com broker. If the platform does not have the necessary indicators, you can download it for free on the Internet and use it in any other trading terminal (for example, MetaTrader) as a signal to open an option on your account.

After installing the tools, the terminal's working window looks like this:

The binary options trading signals review:

• RISE (CALL) - option. The price is above the Moving Average. ADX lines are up; the red histogram is below zero levels.
• FALL (PUT) - option. Opposite conditions: the price is below Moving Average; ADX is down, green histogram.

Open a trade on the next candle after binary option live stream. The time of expiration of options has to be not less than 5-7 minutes even if as a working timeframe it is chosen of a minute, as in our video.

Recommendations about use …  

• In practice, the ADX trend is much more important than specific price levels. While the indicator line is rising, we are looking in option trading signal service for a rollback to the EMA as a situation for a possible entry, while not necessarily reaching the level of 30. For the presence of a trend, it is enough for the ADX line to grow steadily from its minimum. The indicator is above 50, the current trend ends; we remain out of the market.

• We control the dynamics of market volumes. In the event of a breakout or rebound from the Moving Average, the volume histogram should have peak values.

• 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!

• If the broker makes it possible to close the option before expiration, we do it (even if it in profit!) at the emergence of an opposite signal.

Let`s summarize.

The ADX indicator gives good results on all intraday binary options strategies and assets (currencies, stocks, cryptocurrencies). Strict adherence to the rules of the strategy will allow you to find points with a high probability of profit at the high or low of the price.

Once again, we remind you that most profitable options trading signals will only be on trend areas, during the flat periods we remain out of the market!