Best binary options reversal trading strategy
And Fibonacci levels are drawn for every cycle. This strategy also exploit the full potential of value charts. Above you learnt what you are hunting, where to find your prey, and how to bag some prey steady and safe. Now, we will go after the BIG 5. Now, change your zigzag indicator parameters to 2,1,1. How many short-term price cycles do you see now? Each of these cycles is a Fibonacci sequence with a high-low-retracement-projection-reverse.
Look at the chart below:. Within each price cycle between 3 points there are on average 3 ITM trade setups during normal volatility trading conditions. This strategy will produce around setups per currency pair per day, so use it wisely, and be very sure to learn it by heart before you jump in full steam. The 3 strategies explained here work for all currency pairs, commodities, stocks and indices. However, even with the conservative strategy, a trader can produce excellent results if they trade assets, and take 2 high probability trades per asset per day.
Click here to read my next and last post in this mini series. Conservative Long-term Strategy This strategy is for those who are new to this game and want to build up their capital slow and steady. They key here is to be patient until all 3 factors line up. The entry rule is: And your target is trades per day. If you lose, start with the last set of bids: The rules for entry are the same as with the conservative strategy: And remember, You have to stick with the entry rules.
Aggressive Strategy Look at the chart below, how many price cycles do you see? Look at the chart below: Now it gets complicated and wonderful: The Fibonacci is drawn between points 1 and 2 in light blue and marked on value charts the last high and low, 1 and 2 respectively. Now we have the levels and wait for the retracement which can be a wick, or a full candle. Above the retracement area is the white box marked by 3, and the green candle underneath touches that box.
The setup is ready when the retracement candle is followed by a red candle in the direction of the trend. The trade can be short-term to just catch initial upside momentum, or longer-term to capture the potential bigger trend reversal should it arise. The other type of reversal we can have is when the price rallies aggressively enough to erase the former wave of the downtrend; a higher high is created.
Following the higher high, wait for a pullback you can draw a trendline on. Assuming the price makes a higher low higher than the major low which started the aggressive rally , buy when the price breaks above the pullback trendline. If trading traditional markets, place a stop below the recent low. The trade can be short-term to catch initial upside momentum, or longer-term to capture the potential bigger trend reversal should it arise.
These are simple ways to trade downtrend reversals based solely on price action. The method requires that a trendline be drawn on a pullback. Not every signal will result in a reversal, the former trend could resume at any time. This means we need to constantly analyze price action to see when signals in the opposite direction occur.
A profitable exit will depend on whether you want a short-term or longer-term trade. For a short-term trade look to exit within a few bars of the entry bar; you just want to capture the initial momentum. For a longer-term trade you will need to give the market enough time to begin trending in your direction at least one higher high and higher low before considering for an exit.
Downtrends Reversals A downtrend is in place when the price is making lower swing lows and lower swing highs. Here is an example of a downtrend being reversed via a higher low.