«SMA Breakout»: 5 minute strategy for binary options
- VFX Blog
When thinking about how to make money on binary options a trader should not believe in their simplicity. Large "CALL/PUT" buttons cause an immediate desire to click and quickly make a profit. “Binary indicators” with colored arrows have the same goal without the possibility of customization. The result is always the same - loss of deposit. Don't forget, standard technical analysis tools can bring a lot of profit as in the "SMA Breakout" strategy.
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.
Any currency pair. The main requirement is a fixed (2-3 points) spread and no hidden fees.
All Forex trading sessions.
Percentage premium option:
Not less than 70-75%.
The strategy uses two standard indicators.
- Simple Moving Average (SMA). Trend indicators by which we determine the opening point of the option. The strategy is not intended for trading during flat periods!
- Awesome Oscillator (AO). The oscillator should finally confirm the binary option forex signals of Moving Average. Additional signals can be obtained using intermediate levels − in this case, the Williams Magic Oscillator will also work as an indicator of overbought/oversold conditions.
After installing the tools, the terminal's working window looks like this:
Binary options signals:
- Rise (CALL) option. The price breaks SMA from the bottom-up. The Awesome Oscillator histogram is green, above or as close to zero as possible.
- Fall (PUT) option. Reverse conditions: the price breaks SMA from the top-down. Awesome Oscillator histogram of red colour, below or near the zero levels.
You can open options on the price rebound from the moving average and vfxAlert signal. For newbie’s, this trade is not recommended, it is better to wait for confirmation from two indicators!
Open a trade on the next candle after trading binary signals. Time of expiration of options has to be not less than 5-7 minutes even if as a working timeframe it is chosen of minute, as in our video.
Recommendations for use:
- Novice traders should trade only binary signals at the zero crossings of the Awesome Oscillator. As you gain experience, you can use the histogram reversals up for CALL and down for PUT options;
- The longer the sideways movement of the market continues, the higher the likelihood of a strong trend after its completion. In such cases, you can open trades at the first signs of a Moving Average reversal and strong auto binary signals from vfxAlert;
- 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!
- Time of expiration can be increased up to 5-7 minutes if the steady trend is observed. Also during such periods, it is possible to open several options with different validity period to take away a maximum of the movement at minimal risk. If the broker gives the chance to close the option until expiration, then surely we fix the transaction (even if it in profit!) at the emergence of an opposite signal!
Automatic trading according to the «SMA Breakout» strategy is possible: several versions of binary option bot can be found on the network, but, like on any scalping system, it is better to trade manually using this scheme. This will allow you to more effectively tune the system to market changes, and the multicurrency properties of the strategy guarantee you a stable arrival every day.