24Option is one of the first Binary Options Brokers to arrive in 2010. 24Option is regulated and uses TechFinancials Trading Platform, which is considered one of the best trading platform available to date. 24Option has superior payout which’s up to 95%, this’s significantly higher than other Binary Options Brokers which offers payout varying between 71% […]
Talking about stockpair.com, we could consider it as the king of stock pairs trading in binary options. Besides regular assets like Forex Pairs, Commodities and Indexes, StockPair also includes the trading of relative strength between 2 stocks. Stockpair is very similar to Forex that we look at the relative strength of two assets and measure […]
TradeRush was found in 2011 but it already looks like a mature Binary Options broker. Traderush has their headquarters in Cyprus, I don’t think there’s a big problem since I’ve always been using broker from Cyprus, so far they’ve treated me nicely. SpotOption is their chosen platform with at least 85 different assets and a […]
OptionFair was first landing on Binary Options industry in early 2009 and it’s considered one of the older Binary Options broker around. Like 24option, OptionFair use TechFinancials trading platform, which’s tested and tried platform. The payout is up to 89%, and it’s considered one of the better one for payout. In fact, there’s only a […]
Higher level traders can rely on the candlestick trend trading system for its high quality. This system uses multiple trading techniques, among which we have candlestick trend continuation signals. Please read through the article below and click on the link to read the full strategy and to download the indicators.
One of my favorite websites to visit regularly is Forexstrategiesresources.com – a very useful website for traders of forex and provides a huge collection of strategies on forex. Many of these strategies, if not saying almost all, can be applied effectively to trading binary options. And one of them is the Candlestick Trend Trading System. When I first looked at this strategy, I hoped that this will be another outstanding one, as it already contains candles and trends in its name, which are two of my favorites techniques of trading. In addition, I also recognize that this strategy contains many other indicators, such as a moving average and MACD, which are also my preferred techniques.
What Is The Candlestick Trend Trading System
The Candlestick Trend Trading Systemis released by Forestrategiesresources.com as a forex trading technique. This strategy is trend-following and it has all of my trusted and preferred techniques in trading. The technique uses 2 timeframes, 4H and daily charts. A moving average and MACDare also integrated with Metatrader’s Pattern Recognition Master to provide signals. The website provides all the tools you need, so no need to worry here! Also, it is not necessary to be a Metatrader to utilize the system. The only requirement is that you can detect the candle patterns.
First you have to begin with the daily bar chart so as to provide signals. Puts will be traded if the charts of daily bars are bearish, and calls will be traded if they are bullish. In a bullish chart, the trend is usually upward with the moving average being bullish and MACD being bullish. If everything is like this, you can utilize the 4H charts. On 4H charts, you need to seek a bullish signal, e.g. bullish moving average, bullish MACD and bullish candle signal. In reverse, it is also totally true. About the bearish signals, they begin with a bearish chart of daily bars, and on the 4H chart they get confirmed by the moving average and MACD
One important thing you should notice here is that the MACD on this system of charting is not exactly the one you may be familiar to. The display of this system is still standard, yet the color of each bar will be adjusted: in down days, it is red; and in up days, it is blue. When you are using the 4H chart, if the color of MACD turns red, that is a bearish signal; and if it turns green, the signal is bullish. Setting trend with the use of daily charts, we can eliminate false signals and whipsaws. And even more of them are eliminated on the 4H charts if we use the moving average. The moving average also confirms the MACD signals.
The good thing of this strategy is that it incorporates all the things I prefer in a good system of trading: trend-following, multiple timeframe utilization, the use of multiple indicators for signal confirmation, and much ease in use. It generates bearish signals and bullish signals, as it is trend-following. The high versatility of this system also enables it to be applied with any index, commodity, stock, currency pair, or any other tradable candle charted assets. And above all, the programming of this system into trading platforms, such as MT, is very easy.
This strategy has its bad points, as we have once mentioned that even the best binary options (of your choice) have their own bad things. It is a good strategy, but the article lacks information. If more information were provided, this strategy would be highly recommended to newbies, while intermediate traders and higher levels have to meet limited use. The reason is simple. You need to be sharp when reading between the lines and have a good grip of the expected things and the way to deploy the strategy. In addition, quite a firm foundation with candle charting is required and necessary if you want to succeed. Otherwise, you need to find competent software to do the job. What do I mean when I say reading between the lines? Here is an example. The name of the strategy is Candlestick Trend Trading System. Besides in the title, can you find the “trend” mentioned in anywhere else? From the description, do you know how to set trend using the chart of daily bars? You cannot and you do not. My point is that you are supposed to do so. If I were wrong, then this system would be not so good after all
This system is good and intermediate or advanced traders can utilize this system. Despite having predesigned candlestick recognizing software, traders are still recommended to have a good grip of techniques of candlestick charting. Besides that, it is just fine. From the point of the author, it is obvious that some experience is required if you want to utilize such strategy.
One of my preferred indicators of binary option trading is MACD. The application of this tool is very diverse, such as to identify the trends, reversals and to trigger trading signals. This tool is also very flexible in term of time limit. It can be applied to long-term monthly binary options, or even to extremely short-term ones, e.g. 60 seconds. The article below discusses the best of MACD Entries.
The Best Of MACD Entries
This article was created by James Ayetemimowa and posted on Forex Strategies Revealed.
This strategy is simple for traders of short-term binary options and uses MACD in a very rational style. The benefits of this strategy lie in its trend-following characteristic and the utilization of many indicators at a time, thus it is remarkably useful for trading binary options. Furthermore, MACD is also applicable to longer timeframes thanks to the way it works and its flexibility in timeframe application.
What Is “The Best Of MACD Entries”
This question is not easy to answer, as the application of MACD to give good signals is very diverse. It was fairly easy for James as he has been able to precisely quantify the best entry signal of his belief. In his model, he utilizes 5-min charts with two MACD’s and two moving averages. For the charts, my suggestion is using candles, as I think it is the most effective. The mentioned two moving averages are respectively 100 bar simple moving average and 50 bar simple moving average. And both of the remaining two MACD’s are up to 12/26/9 standard, yet one is oscillator style while the other is histogram. In combination, these indicators provide signals with movements with the time range of minimum 20 minutes and maximum many hours.
How James’ “Best Of MACD Entries” Works
Signals are provided on a pretty regular basis as it is on the 5 minute charts and the setup is not at all complicated. About the two moving averages, they are utilized to identify trend, the type of trading and as part of the signal. The positions of the two SMA’s help to identify the trend. The market will have a bearish trend if the long-term 100 bar SMA is above the short-term 50 bar SMA. It will be a bullish trend if the long-term 100 bar SMA is below the short-term 50 bar SMA. Traders are advised to carry out puts when the trend is bearish and calls in a bullish trend. When MACD is oversold or overbought and creates a crossover simultaneously with the prices that have pulled back past the SMA’s, a signal is generated. This implies that it will take some time for the prices to have correction above the moving averages in a downward trend. If this situation takes place, when the MACD oscillator is overbought and a bearish crossover occurs, a signal will be provided. The MACD histogram can give predictions about the signal and the crossover. You can observe in the provided example that the MACD histogram is clearly diverging and indicating the lower high and consequential buy signal that the system has created.
This strategy is very well-designed and effective and it is an exceptional example, as well as an application of my preferred indicators. I have put plenty of stock in the old strategy 12/26/9. This system has utilized my preferred indicators as well as combined a great number of a good strategy’s features favored by many. Multiple timeframe analysis is not incorporated in this strategy, which in my consideration is a benefit. The strategy has an incorporation of well-used and trusted and overlooked indicators that put together the momentum and trend to provide handy signals for the trading of binary options that have short-term, say days, hours, or even shorter than that.
There is no bad thing to find about this outstanding strategy. It is so excellent and admirable. Sir James Ayetemimowa has done what many people have dreamt of with his great MACD system.
Whether or not this MACD entry is the best is not so sure, but it is absolutely an outstanding one. This strategy is highly recommended to any kind of traders of binary options, including those who are young, old, with or without experience, commodity, stock, forex, or any other kind. There are various strategies in the binary option market with diverse effectiveness, but we are sure this one is completely and absolutely wonderful. If you learn this strategy, cherish it and develop it into your own strategy, I can say that you will be meeting your fortune soon.
The application of stochastic crossovers in strategic trading imposes many risks. Stochastic is a well-known tool for traders, but it is not a strategy on its own. It needs to be incorporated with many other indicators to achieve full effectiveness. If considered as a trading strategy on its own term, stochastic is not very favorable. However, it will turn out to be very effective in identifying trends, entry points, resistance and support if placed in conjunction with other tools in the toolbox of traders.
What Is Stochastics?
Bearing much resemblance to RSI and MACD, as an oscillator tool, Stochastics obtain measurements about the movement of market in many ways, with the main focus placed upon the strength of direction over time. The movement range of oscillators is usually around 0, but in the case of stochastic, it falls between 0 and 100. The oscillator movement goes in the same pattern as that of the underlying stock in the market. For example, if a stock goes up, the oscillator will move up.The oscillators can move within their normal range or to positive and negative extremes in both bull markets and bear markets. The point here is that an oscillator may move up the bullish extreme in a bear market, or plummet to the bearish extreme in a bull market. Such movements to the extremes of both ends are in fact the potential entry points in the underlying trend, not necessarily signals of reversal.
How Stochastic Works
The inventor of stochastic was George Lane, a futures trader. Due to the fact that stochastic was established for the trading of futures, it works within very short timeframes, which is also a very good feature for the trading of binary options. The methodological assumption of stochastic is that when a stock is on an upward trend, prices will close within the top of the range in the day, and in the other hand, when a stock is on a downward trend, prices will close within the bottom of the range in the day. There are two lines used in the stochastic indicator: %D and %K. The %K measures the variation of stock closing prices on a daily basis. The short-term range increases the volatility of %K and provides lots of incorrect signals. If the %K line is smoothened, we obtain the %D line, which plays an important role and is named the Signal Line. The formula of the indicator is as follows:
C = Closing Price, L5 = the lowest closing price for the last five days and H5= the highest high for the last five days.
ñ %K = 100[(C-L5)/(H5- L5)]
H3= 3 period sum of (C-L5) and L3= three period sum of (H5- L5)
ñ %D = 100 (H3/L3)
When plotted over time, we obtain the resulting two lines moving within the range of 0 and 100. The %K line yields clear patterns with great significance but such patterns are illegible due to much volatility. The %D line provides smoothened data and the signal line for the %K to cross over, along with its own signals.
How to Use Stochastics for Crossovers
In binary options, we have 2 main methods for the application of stochastic crossovers. The first method is when the %D line reaches an extreme, reverses, and moves away from the extreme. This signal is considered to show signs of weakness in a bear market and strength in a bull market. When %D goes below the bearish extreme, crosses back over and reverses in a bear market, we have the bullish crossover.
Depending upon the timeframe of the observed chart, the term of these signals can be longer than you expect. Sometimes an expected movement only happens after 2 or even 3 crossovers, which, however, is the basis of another technique. I will discuss this technique later on.
The definition of crossers is very simple in shorter terms: crossover means one line crossing over another. In our case here, the %K line crosses over the %D line, hence creating the crossover. Nevertheless, you are advised to fully understand the underlying trend if you want to apply this technique, since trading against the trend with this technique may yield big losses. Therefore, if the market trend is bearish, a crossover occurs when the %K line moves above the %D line and crosses back under the%D line. Oppositely, if the market is bullish, a crossover occurs when the %K line moves below the %D line and crosses back over the %D line.
Advantage of this technique
This technique has an obvious advantage. It gives us trustworthy entry signals in bull and bear markets. If the trend has been accurately identified, you can detect the stochastic crossovers in all short-term, mid-term and long-term charts, and the signals of these crossovers are very strong when many timeframes meet and provide signals simultaneously. Now you think of an ocean in your mind and an incoming tide, so the long-term trend moves slowly, just like the tide. Then at specific occasions, all of the components – the ocean, the ripple and the wave – retreat at the same time, which resembles the correction times of markets. This pullback creates favorable conditions for a large number of investors to join and have larger funding. This is an example of stochastic crossover convergence. It takes into account the tides and the ripples of the market and shows signs of a coming influx of investors when the tides and the ripples meet together.
Disadvantage of stochastic crossover
Stochastic crossover has a disadvantage of being a lagging indicator and if your entry is not accurately identified, the crossovers will give lots ofwhipsaws. Crossovers can take place in any market at any time. If crossovers are the only source of signals for you, chances are that you will be missing a huge amount of profit or even worse, you may meet huge losses. In addition, if the market trend is not strong enough, the crossovers will be more likely to produce whipsaws and false signals.
Generally speaking, in my opinion, stochastic crossovers are effective, particularly if they are applied in combination with other things in a trader’s toolbox. Traders should not just base their strategy on one indicator or technique only, such as stochastic. This technique is still very useful in the toolbox. There are many other applications of this technique and I will be discussing them later on.
What Is Stochastic?
The strategy we introduce to you today is the simple Stochatics. The mechanism behind this strategy is the random walk/Brownian theory type analysis, a rather complicated theory but very effective in foreseeing the moving of financial assets in the market which might explain the popularity of this strategy among traders of all financial assets despite the fact that it was originally built for forex market. This theory relies on the tracking of daily prices which are completely random for a long time and draw the rule of the randomness from that observation. Imagine you and you dog walk on the pavement, your dog might move quickly from one place to another and we don’t know where he would move the minute later but we could limit its movement and predict your general direction.
The name Stochatics is chosen purposely as it is an ancient Greek word describing the holes made from a machine gun. Each bullet from that gun is aimed at particular target which is completely unknown although we might see its direction. More about this topic is in my review stochastic for binary options here.
How Does This Strategy Work
Stocillator basically works as an oscillator, which has two different line %k and %d. The former line is the short-term one and acts as your dog while the latter is you. Therefore, this strategy follows the movement of the oscillator through the peaks and troughs to picture the trends as well as entry and exit point. Though working well in harmony with any other indicator and in any time frame, its signals particularly concentrate on the one indicating the trend.
How Does the Geek Simple Stochastic Strategy Work
As I mention above, two different lines associate in this strategy with the support from additional analysis which is the basic fundamental one, trend line and long-term support/resistance. This strategy begins with the 5-year chart of weekly candles, and then put suitable support and resistance lines where they are needed; this is quite difficult and might need certain practice. You could realize a support or resistance as they might be a peak, trough or congestion and the trend lines as they comes from two consecutive peaks or trough with the extension to the right.Be careful as you might be subjective while drawing the lines through the tops of the lower and upper candle wicks. You chart now could display the long term trend and its direction. Take a look at the Semiconductor Index as it aligns with strong stochastic buy signals, which is the signal to take the entry and move down daily the chart.
- Long Term Signal - The long-term signals loom as in the situations where the %k is above the %d and hit the peak as the %d is heading up. As the %k moves down and then up, additional signals might appear.
The Buy Signal
If you are looking for any buy signal, then it might be better to put your effort on the search for a bearish signal. The buy signal will appear regularly on the daily chart but if the chart analysis have a bullish result, then it is better to look for bullish signals. In addition, if the resistance is not on the upper side, then there shall be no reversal. A good entry point could be determined as the last buy signal from the weekly chart in the one year chart of daily prices appears the same time as a move down to the support of an up-trend line. The method to find the entry is the same. First, you must look for possible areas of support or resistance and put your lines here. Be patient and wait if the SOX are above the support but the stochastic is broadened. The stochastic would send you a signal as it is ready to trade. For example, the prices on the SOX may be up, down or sideway. Remember to wait for a strong signal to begin trading. A strong signal often appears after a weak one which is just before the long term fired.
- The Buy Signal - There is no clear difference between a buy signal and other signals on the weekly chart except the distinction in the time frame. Particularly, two signals would tell you what to do in this case: the long-term one suggests what to buy and the daily one indicates when to buy. A call signal appears as the %k is above the %d in an uptrend. In addition, in a down trend, it is true with the reserve. An option expiring in only one or two days should be used in an uptrend if the asset is about to reach the resistance However, we should use an option with longer expiration period such as several week when there is no resistance.
Advantages of the simple Stochastic Strategy
This strategy is really effective as it is equipped with many advanced techniques. First, we highly appreciate Stochastic as it has engaged with multiple time frames and multiple time frame analysis. Another analysis in this strategy is the trend analysis, which aligns with the quote “trade with the trend, the trend is your friend”. This is truly a simple and trustful method to trade and to build strong base for further research once you are ready with your knowledge and experience. It also harmonizes perfectly with other techniques and analysis as well as releases other signals rather than the trend ones.
Disadvantages of this Strategy
The most annoying thing about this strategy is time-consuming. You must be patient to start trading and to gain profit and patience is the thing that not much people have. Furthermore, signals from this strategy often come more slowly than other methods as they often appear after many moves have been deployed and also the signals are not really strong if your underlying assets are in trend.
How to learn this Strategy
You could learn this strategy by two ways. The first way is to study about stochastic analysis. This means learning about the signals of reversal and divergences, which undoubtedly helps you understand market moves easier than normal techniques. The second way is to use the Fibonacci Retracements that allow you to verify whether the support and resistance lines you draw are true or now. If a Fib meets one of your lines, the converging point is a good market reversal.