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 […]
Goptions start offering Binary Options trading since 2009. Goptions doesn’t really mark its name at the time they appeared, however recently they have been making a lot of efforts to push themselves to the top of the chain. The brokers provide trading services to client globally with their SpotOption Binary Options platform, offer decent payouts […]
Economic data can have great influence in the financial markets. In fact, data are capable of causing tremendously volatile activities in the market. As a result, wise traders will wait until after the release of data to begin making trades. Strategy ‘M’, short for ‘Milos’ – the name of the author of this strategy on BinaryOptionsThatSuck.com – aims to help in trading macro-data and provide traders with a good base. So what is strategy ‘M’ actually?
Each strategy is designed for use in different markets and different scenarios. If you are an experienced trader who has tried various strategies, you should be able to know which strategy is suitable for which market, thus improving your chance of winning. Using strategies also enables you to learn about market and trend analysis. After a while of searching for a good strategy, I found that this one is quite decent. Strategy M is designed for 15 minutes expiry, and I have tested it in pretty much every market and every condition, ranging from the more stable Australian session to the more volatile Asian market, in order to find out the behavior of price movement in 15 minute expiries, as well as to focus on macro-economic data or news release.
Strategy M – How It Works
This strategy focuses on a very short time frame. For the purpose of determining trades, I utilize trend lines and begin with charts of daily prices and get down to hourly charts later. Why should we use the trend lines? Because they are one of the most basic and effectivetools that can help binary options traders find out the underlying market sentiment. This strategy uses the 15, 10 and 5 minute candlesticks for signals. First, we draw the trend line from the lowest bottom to the highest peak, then the support and resistance lines. All these lines will help us in determining trades once data or news is released.
After completing the trend, support and resistance lines, the next thing to do is using binary options indicators, which are, in this strategy: the MACD, Stochastic Oscillator and RSI (Relative Strength Index).
Instructions for Taking Signals
Signals should be taken before macro and micro economic data are published. It is important to pick which pair and which announcement to trade carefully, considering how this strategy can be used on any currency pair. Make sure your charts and initial analysis on the daily and hourly charts are ready before the announcement. Make sure you know the answers to these questions: Is the market oversold or overbought? Is it near support or resistance? Is it approaching the trend line? Which direction is it moving in, up/down or sideways? After getting all this information, move down to the 15 minute chart to obtain a clearer view of the market and find the underlying longer term trends. Right before the data are released, take a trade in the direction of the underlying trend from the 15 minute chart for your signal, which can be any confirmation, or break-out/break-through of trend, support, resistance, etc.Remember, your signals must be confirmed by the indicators. On the occurrence of the signal, place an entry in the direction of the break using a 15 minute expiry. When the data are released, an in-the-money trade is expected to be generated by the market sentiment that follows the release of data.
Strategy M – The Good Points
Maybe the best thing about this strategy is that it brings excellent profits in the 15 minute expiries. This is explained by use of multiple time frame analysis to view the short term movement from the proper longer term perspective, and the use of multiple trusted indicators like trend lines and MACD. We can use it in both directions allowing bearish and bullish trades since it utilizes the underlying trends. Another good thing about strategy M is that it offers you the easy timing for entry position, since you just need to place trades minutes or seconds before the release of news or data.
Strategy M – The Drawbacks
The main drawback of this strategy is that it uses a short time frame strategy, which increases the possibility of longer term trends adversely affecting your trades, especially when you are trading against the longer term trends. Another drawback is that it depends on data, which means you cannot use it every day. For example, you should not use it over the weekend, when there may be economic releases from China, Japan, or an EU country, etc.
Overall, this strategy has a lot of potential, since it provides us with a trading base from the signals generated during volatile times of economic data releases. It may not be suitable to new or intermediate traders due to its complexity: in order to use it effectively, one needs to know how to do analysis in a calm state of mind. I would also like to remind you that most traders will not choose to trade during the release of economic data because of the market volatility. Instead, we should only make a trade until after the release to see where prices are heading.
What we see in the market nowadays is the rise of complicated strategies with a bunch of complex rules and indicators. I guess people all have the same feeling of confusion and being annoyed when they have to trade with something like entering Call if X>Y and A close to B, then checking to see if X<C as C is the gap between A and Y, etc. That’s probably the explanation for the popularity of the very simple yet useful Parabolic and MACD strategy. This review will show you how this strategy becomes so well-known.
The Parabolic and MACD mechanism
On the contrary to other complicated strategy, the Parabolic and MACD Trading System utilizes only two simple indicators both of which are set as default in your Mata Trader 4 Platform so there is no need for any download and installation. The first indicator is the MACD Histogram, a signal that moves around the Zero level. The other one is the Parabolic SAR (Stop and Reserve) which has been mentioned in another article regarding this tool.
Shortly, that article illustrates the mechanism behind PSAR Indicator movement which can be explained like this: an up signal appears as the dots are below price and a down signal pops up when they are above. These are only two of many other uses of the Parabolic and MACD Trading System but these default indicators are really easy-to-use. The result appearing on your chart after using the MACD might look like this:
As the Parabolic SAR and the MACD meet, or when we see the Yellow and Red arrows on the chart with the same direction, it is a clear signal to trade. It is also very significant to follow the histogram position on the chart and see whether it crosses the zero level or not. If it is above the zero, it’s a bullish signal and if it is below, it’s a bearish one.
So when we want to make a Put, two requirements must be met: the MACD must be below the zero level and the SAR dots are above the price. The order of their appearance seems not to be really important, but at the time of the entry, both of them must be completed. Here is the Call and Put entries:
- MACD histogram is above zero level.
- Parabolic SAR is below price.
- MACD histogram below zero level.
- Parabolic SAR dots above price.
It is also recommended in the article that we should have exit points. However, this suggestion is useless as they are forbidden in Binary Options trading. Thirty minutes, one hour, four hour and daily are the common time frame set for this strategy with no expiry times as it is Forex Strategy. Nevertheless, I believe we should set the expiry at least 3 times longer than the entry time frame. Of course, this may change depending on your real needs.
Disadvantage of the Parabolic and MACD Trading System
Once the market is full of noise, it is almost impossible to track the MACD and Parabolic dots moves as they quickly go from one side to another. This definitely results in a lot of Out of Money Trades which would reduce traders trust in this trading system.
Moreover, following this strategy rules also means that your account might gets burned if you try the Puts in an uptrend or the Calls in a downtrend.
Advantage of the Parabolic and MACD Trading System
If you have some experiences in this market, operating this system is really simple as the signals and dots are generally accurate. And also put in mind the basic rule of this trading platform: don’t place Puts when the prices go up and vice versa.
With only two indicators but this strategy is obviously a very easy and profitable trading system. Having some experiences from the market will make it even more smoothing for you to explore this strategy.
Remember to classify the signals as you would be more successful when trading with the most popular ones In the market. Therefore, you should clarify a trend before using this strategy. This strategy works best with Banc de Swiss.
The phrase “The Trend is your friend” must be very familiar to you if you are really into this business. However, lots of “experts” in the field use this phrase as their guiding quote without really elucidating the meaning of the phrase and how to earn money from the trend if it is our friend. In this article, I will be discussing details of various methods of earning money from our friend – the trend – and the correct method of trend identification. Keep my words in your mind that your trading decision should never depend upon one indicator or tool only. I will be discussing this in the article, too. First, let’s take a look at how to identify the trend:
An uptrend is identified with Higher Highs and Higher Lows.Very simple.Here’s an illustration:
This is what an uptrend look likes. Every new top/peak/high/etc. (whatever you want to call it) is higher than its previous and every new low/bottom/etc. is higher than its previous. This says the price is moving up in an uptrend.
A downtrend is identified with Lower Highs and Lower Lows, as opposite to an uptrend:
If there are Lower Lows and Lower Highs, as opposite to the case of an uptrend, we have a downtrend. In order to trade a trend, trend lines must be drawn. This technical analysis tool is almost underutilized by most traders, although it has great usefulness.
In order to draw a trend line, you need to connect two Lower Highs in a downtrend or two Higher Lows in an uptrend. Remember: In a downtrend, connect the Highs; in an uptrend, connect the Lows. Don’t get confused and mixed up here.
Once the first two points have been connected to form a line, we can begin “fishing”. The third touch of the line (and the following ones) can be traded along the trend’s direction if there are other indications saying that the price will bounce from the point. So the question is which indications are necessary here? We have discussed various tools, so let’s pick one up and try it:
Combining the Trend line with Japanese candlesticks:
Here we can see a Pin bar (Pinocchio bar). This Pin bar is very important. It is a nice reversal/rejection candle combined with a bounce from the trend line and the downtrend. The trend is your friend, but the Pinocchio is surely your best friend. These buddies help you earn easy money. Let’s take another example:
We can draw the trend line by using the first two Lows. Then, any Japanese candlestick formation can be traded as long as it touches or comes really close to it. In our case here, there are two good trades displayed with a Pin bar and an Engulfing Pattern.
Combining the Trend line with Divergence
In this case, when the trend line is touch for the third time, a Hidden Bearish Divergence can be recognized clearly with RSI making a Higher High and price printing a Lower High. In this case, a Put is super effective and the price plummets remarkably. At the peak of the Divergence, the Pinocchio bar on the trend line makes me feel much more confident in my trade.
Combining the trend line with Fibonacci
The bounce I performed from the trend line is maintained by a test of 61.8 Fibonacci level. This is such a good trade. The trend, my friend, keeps helping me earn money.
The market is a totally unpredictable and very erratic. It doesn’t always act up to our expectations. It is designed to destroy our strategies, take away our confidence and deprive us of our money. Even if you have a trend line with the combination of 10 or even more indicators or tools, the market still remains beyond the predictable zone. At times, the price goes through it as if nothing could change it, and then when our option comes due for expiration, the price suddenly reverses, like a bucket of cold water to the face. The bad thing here is that we have to accept that fact and we could do nothing but to take good entries in line with the trend. Two more things to remember: The trend is a friend, but this doesn’t mean it will always be a good friend; and all trends have an end.
There are good chances for success of trades that are taken in the direction of the dominating trend. If there is a trend confirmed and set in its place, the combination of a bounce from the trend line and a tool, such as Divergence, Fibonacci, Japanese Candlesticks or any other trusted indicator, is a trade that you should never miss. In Binary Options, Stocks, Forex, or any other market, sure trade never exists. The best we can do is to ensure the balance of probability is tilted to our favor.
What a trend can do for you has been illustrated with the above examples. I personally think the trend is more than a mere strategy. I think it should be considered a perspective on trading and a method to make sure we are riding the trend all the time. The precise entry is now not the primary concern as an entry signal can be taken from any trusted tool or indicator without limitation, such as those I discussed in this article. What I did here is to give examples to illustrate clearly and exactly the phrase “The trend is your friend”. If you put an end to your risky against-the-trend strategy and put yourself in the flow of the trend, I am very sure your track record will have great improvement.
The official announcement is that from February 23rd 2014, StockPair will stop all services provided for clients from the United States. Stockpair has long been a very prestigious and preferred brokerage in the industry, so this service halt is very astounding to many people. Services and features from Stockpairhas always been top-notch, for example their platform was excellent and its features are far morefavorable than those in other platforms, especially when it comes to expiration. It is such a great pity for U.S. traders and accepting this news is for sure not very easy. However, the reason is reasonable. It was because Stockpair is making their attempt to obtain the official license from Cyprus Securities and Exchange Commission (CySEC), under which they are required to stop providing services for clients from the United States.
We want to express our best wishes to Stockpair for their keeping themselves regulated and on their way to gaining greater reputation.