Strategy Pathfinder, we trade flat and reversals
- VFX Blog
- Estratehiya
Options in the direction of the current trend bring the maximum profit, but it is important to open a deal as close as possible to its beginning. One of the most reliable binary options signals indicating the beginning of a new movement will be the end of a lateral movement (flat), in which the market spends up to 70% of trading time. The Pathfinder strategy based on standard technical indicators gives consistently predictable results both on the flat breakdown and on the binary option from its borders.
Strategy characteristics
| Type: | Trend and flat |
| 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%. |
Used indicators
The strategy uses three standard indicators.
- • Simple Moving Average (SMA) − shows the direction of the current or new trend.
- • Bollinger Bands (BB) − the horizontal direction of the BB lines confirms the presence of a flat, the breakdown of the lines will be the binary signal of its end. If the range is wide enough, you can open options to roll back from the borders. This method is recommended only for experienced traders!
- • Relative Strength Index (RSI) − the oscillator will assess the current balance between buyers and sellers: the predictor above level 70 − the end of the uptrend (overbought), below 30 − the end of the downward (oversold).
Signals of binary options signals:
- CALL option. The price and the Moving Average line roll back from the lower limit of BB or cross its middle line from bottom to top. RSI is up or out of overbought (level 70);
- PUT option. Price and Moving Average cross the BB average from top to bottom or unfold from its upper limit.
Recommendations for use:
- Even on the minute timeframe, RSI rarely goes into the extreme zones and you can miss a lot of good deals. If Moving Average and RSI start moving in one direction − you can open an option!
- Despite the fact that you can trade throughout the day, the most profitable results were obtained in the second half of the US session (from 16:00 UTC) and the end of the Asian session (until 06:00 UTC).
- We monitor the binary trading platform for the release of important fundamental news and statistics. We do not open the option immediately after the publication, and, if possible, close the current transaction 15-20 minutes before publication.
- 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!