«Woodcutter strategy» - fast profit on binary options
- VFX Blog
Binary options for newbie’s strategies often go the way of complication: up/down arrows instead of regular Fractals, indicators in the form of color diagrams with incomprehensible signals and other «improvements» do not help to make a profit. Meanwhile, professional players and trading signal services, such as vfxAlert, use simple and time-tested combinations of standard tools, such as in the «Woodcutter» 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 sets of moving averages: two simple (SMA) and one exponential (EMA) moving averages.
Classic trend indicator, which will determine the general direction of the scalping trend. The strategy is not intended for trading during flat periods. We trade only if the range is between at least 15-25 points!
- Standard MACD (12,26,9).
This indicator works both as a trend and as an oscillator instrument, so it will be the final signal to open an option.
After installing the tools, the terminal's working window looks like this:
Binary options signals:
SMA(85) and EMA (75) are considered as «long» moving averages by which the direction of a trend is determined, SMA(5) will be «fast» moving average and the first signal for the opening of the option.
- CALL option. The fast-moving average crosses from down up both slow-moving averages with confirmation by the MACD indicator (one or more bars have to be above the zero lines).
- PUT option. The fast-moving average crosses from top to down both slow-moving averages with obligatory confirmation on the histogram of MACD (one or more bars have to be below the central line).
If all moving averages are close to each other, then this indicates a trend change. We remain outside the market and wait for the next signal.
Open a trade on the next candle after 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 about use
- the longer the sideways movement on 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 Moving Average reversal (as shown in the picture) and a strong binary option trading signals from vfxAlert;
- if the broker gives the chance to close the option until expiration, then surely we fix the transaction (even if it in profit!) at emergence of an opposite signal − repeated return crossing of slow-moving averages a fast-moving or if the histogram of MACD changes the direction of rather zero levels.
- 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.
Intraday strategy «Woodcutter» represents rather reliable system of a conservative scalping for trade in the stable market. Parameters of trade tools can be changed according to the current volatility. Once again, we remind you that most profitable binary options signals will only be on trend areas, during the flat periods we remain out of the market!
The strategy is quite well automated, but as with any scalping system on a minute timeframe, it is better to trade manually. This will help to effectively adjust the strategy to MACD reversal signals, rebound from moving averages and get a stable profit every day.