Any seasoned binary options trader knows that the prices in the global foreign exchange market remain within a range for 60% to 70% of the time. Even when the market is trending, the price fluctuates and creates either upward sloping ranges or downward sloping ranges.
Hence, trading the binary options market with a trending market tends to have better odds of winning, where traders have the possibility of making consistent profits compared to trading during a range bound market.
Today, we are going to discuss about a trending market strategy that has the ability to pick when there is a higher chance of the price to keep trending, regardless it is on an uptrend or a downtrend.
If your binary options broker provides MetaTrader 4 trading platform, you are in luck. However, this strategy only needs three moving averages (MAs) so as long as your broker offers a charting package that offers custom MA periods, you would be fine.
The last resort will be downloading the MT4 platform of any Forex broker and sign up for a demo account, then use the charts to pick your trades while inputting the CALL or PUT orders with their options account provider.
Preparing the Chart for MA 13 – 50 High Low Trending Strategy
In order to trade the “MA 13 – 50 High Low Trending Strategy” you need to add the following Moving Averages to your chart:
- Simple Moving Average with Period 50 – Apply to High
- Simple Moving Average with Period 50 – Apply to Low
- Simple Moving Average with Period 13 – Apply to Close
Once you have added all three Moving Averages on a blank chart, it should look similar to the following chart:
How to Trade Binary Options with the MA 13 – 50 High Low Trending Strategy
Once you have prepared the chart properly, trading the MA 13 – 50 High Low Trending Strategy would be very easy.
It is basically an MA crossover strategy with a twist. Instead of having the lower period of MA crossing the higher period MA, we wait for the lower period of MA to cross the higher Period MA, which is plotted based on the highs instead of the closing price, and vice-versa.
If you take a look at the sample chart, you can see that once the 13 period MA crossed above the 50 period (applied to High) MA, the uptrend continued for at least several bars.
In contrast, when the 13 period MA crossed below the 50 period (applied to low) MA, the downtrend continued.
Avid readers of No1BinaryOptions know that we are big fans of bar breakouts and you can combine the bar breakout strategy with the MA 13 – 50 High Low Trending Strategy as well.
Instead of placing the CALL or PUT order when the MA crossover happens, waiting for the price to penetrate above the high of the bar during an uptrend, or low of the bar during a downtrend, respectively, would certainly increase your odds of making profits with this strategy.
Have you tried the MA 13 – 50 High Low Trending Strategy? Share your feedback and views with our readers in the comments section below.