Moving Average Tunnel + MACD + Signals for binary options
- VFX Blog
Strategy characteristicsType: Trend
Timeframe: Any in the range M1-D1. In our case, M1 is used, but with an increasing period of analysis, the accuracy of the signal increases.
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%.
- Simple (SMA), exponential (EMA) and weighted (WMA) moving average with a period of 10 The main indicator for determining the trend and direction of the next option. We draw the attention of traders that this strategy is exclusively trend and does not provide range binary signals. But if the lateral movement goes within 25-35 points you can try to trade!
- MACD (12,26,9) with default parameters. Simultaneously oscillator and trend indicator. Used for final confirmation of moving average signals.
The strategy uses a «tunnel» of three moving averages. Weighted moving average shows a global trend, exponential and simple to show the point of opening option. Open only when all the averages cross and signal of «fast» MACD.Options open on the next candle after the breakout with an expiration time of 3-5 minutes. The reliability of the signal increases if most or all of the candle body is above all Moving Average.As you can see, even beginners should not have problems with trading, but there are several factors that need to be considered before opening an option:
- The release of strong fundamental news "knocks down" the logic of most technical indicators and graphic patterns. Moreover, in contrast to the stock and currency markets, one cannot put a pending option, it is necessary to react immediately at the time of exit, which is difficult to perform technically and psychologically difficult. It is recommended during such periods to stay out of the market. There are many signals on small timeframes intraday. It is better to wait for the next one on the established trend.
- Mutual delay of the Moving Average and MACD signals is observed, but this is normal. It is completely impossible to remove the delay, but its dynamics on each technical tool is different. This makes it possible to improve the quality of binary options signals and enter the market in the best possible way. You can verify this from our video on the strategy «MA Tunnel + MACD».
- Expiration time. Both very short (1-2 minutes) and very long (10-15) terms of options are considered incorrect. In the first case, the trend does not have time to go in the direction of free binary signals, in the second the movement may end and a reversal will begin. In both cases, we get a loss. Remember that in our case the strategy is used for scalping, it is better to stay on the expiration time in the range of 4-6 minutes. But if the trend is strong, you can increase the expiration to 8-10 minutes.
- We look at the higher timeframes M5-M30 where the first signs of a weakening of the trend or its reversal may appear, which will then be followed by a reaction to M1. Separate attention to the moving average, there may be typical situations when you can retreat from the rules of the strategy and open an option!
- Important note: after sharp impulses or strong trends, the MACD, like other oscillators, can «trample» for a long time above or below the zero levels without crossing it. At the same time, moving averages can produce good signals. To open options in such cases or not, everyone decides for himself, but beginners are advised not to hurry and wait for the full signal better with confirmation from vfxAlert.