Need more profit? Trade on cross pairs
- VFX Blog
Newbie’s, thinking how to make money on binary options, start testing strategies for major currency pairs. Usually, the first trade is opened on EUR / USD. If the profit continues to be traded, but do not forget about other Forex assets, such as cross pairs.
There are three types of quotes in the Forex market:
- Direct Quotation. The amount of currency can be bought for one dollar. In the first place in a pair of "base currency".
- Indirect Quotation. How much USD is contained in the currency (Euro, Pound, Yen, etc.) Paired in second place or "quote currency".
- Cross Quotation. The ratio of two currencies to USD, which is not included in the quote. Cross pairs are not covered in detail in learning on binary options trading, although they have advantages over major pairs:
More currency pairs and binary options signals;
High intraday volatility - profit on M1-M5 timeframes;
Profitable cross-pairs in every Forex session;
Less correlation with USA news and statistics;
Let's see how crosses work with three simple strategies.
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 cross currency pairs. 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%.
EUR/GBP - Brexit is over, profits remain
The most liquid Euro Zone crosses pair. Even despite Brexit, the British pound ranks second after the euro in terms of the trading volume. The pair makes a profit not only in Europe but also in the Asian Forex session.
The Heiken Ashi chart, compared to the classic "candles", uses additional smoothing to filter out market noise, which is a lot on cross pairs. Binary options trader sees only the trend and opens the option correctly.
Binary options signals:
We will use the simplest and most visual live trading signals - a change in the color of the chart when the trend is reversed. To open the option, you need to meet two conditions:
- There must be at least three candles of the same color and direction before entering the market;
- If the candle bodies are rising, this indicates a trend development. Accordingly, when the trend ends, they decrease, and the shadows increase;
- Rise (CALL) option. At least three blue candlesticks up.
- Fall (PUT) option. At least three red candlesticks down.
GBP/JPY - intraday scalping
There is high volatility in all Forex sessions. You can open short-term options with duration of 3-5 minutes, but only when there is confirmation from the binary signals software.
The strategy uses one indicator:
Rainbow Moving Average. The indicator consists of several simple moving averages with the same period and different offset relative to the current price. The idea of the indicator is that a different offset shows the trend on higher and lower timeframes relative to the current one and makes it possible to accurately open the binary option. A similar technique is used in the Ichimoku Kinko Hyo strategy and the best binary signal provider.
The indicator is not available on all binary options sites. In our case? the broker's Deriv trading platform is used Binary.com. If your broker does not have this indicator, you can download it for free on the Internet and use it in any other trading terminal (such as MetaTrader) as a signal to open an option on your account.
After installing the moving averages, the terminal’s working screen takes the following form (the color gamut can be changed):
- RISE (CALL) option. The price punches from the bottom up all Moving Average or goes into the "cloud" of the indicator. The second option is only for professional traders!
- FALL (PUT) option. Opposite conditions - the price below all Moving Average or from top to bottom goes into the "cloud".
- Parabolic SAR. Determine the direction of the short and medium-term trend. Indicator points are below the price and directed up - an uptrend. Higher prices and directed downward - a downtrend.
- Stochastic − the oscillator will assess the current balance between buyers and sellers: the predictor above level 80 − the end of the uptrend (overbought), below 20 − the end of the downward (oversold).
- Rise (CALL) option. Parabolic SAR below the price. Stochastic is above zero levels or in the overbought area.
- Fall (PUT) option. Opposite conditions: Parabolic SAR is higher than the price. Stochastic also goes down to oversold.
- Even on the minute timeframe, Stochastic rarely goes into the extreme zones and you can miss a lot of good deals. If price and Stochastic start moving in one direction − you can open an option!
- 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. Most strategies and top binary signals don't work on the news!
- Heiken Ashi shows the end of local correction or rollback well. The closer the resumption of the trend, the greater the shadow of the candles, even if the body remains at the same level. It is recommended to close the current profit/loss when changing the color of the chart.