This Binary option strategy is a trend action strategy that gives NON-Repaint(arrows) buy/sell signals. This setup will suit scalping, day trading, multi-day trading, and binary options. This strategy hinges on the ability to identify and respond to key price levels and trends, using a combination of analytical tools to make informed trading decisions.
Understanding the Trend Action Strategy
The essence of the trend action strategy lies in its focus on trend-following signals, primarily filtered through significant price levels. These levels are not arbitrary but are identified using specific strategy tools that gauge the market’s reaction to them. The strategy employs two critical indicators to pinpoint these price levels:
- Support and Resistance Levels: This tool involves marking out price points where the market has historically shown a reaction. These levels are further numbered based on the frequency of the market’s response in the recent past.
- Sniper Market Indicator: This second tool identifies levels based on higher buying or selling pressure areas.
Traders have the flexibility to use these tools either in tandem or individually. However, it is observed that signals tend to be more reliable when an area demonstrates multiple verifications coupled with medium or strong buying/selling indications.
This Binary Option Strategy is entirely manual. The indicators produce the signals, but any decisions to enter the market and to set protection stops or profitable exit stops will depend on the trader. Therefore, the trader must be familiar with the principles of risk and reward.
Trend Action Strategy can give you trading signals you can take as they are or add your additional chart analysis to filter the signals further, which is recommended. While traders of all experience levels can use this system, practicing trading on an MT4 demo account can be beneficial until you become consistent and confident enough to go live.
You can set the binary option strategy to send you a signal alert via Mobile Notification, platform pop-ups, and Email. This is helpful as it means you do not need to stare at the charts all day, waiting for signals to appear, and you can monitor multiple charts simultaneously.
Trend action strategy can be used on any Forex currency pair and other assets such as stocks, commodities, cryptos, precious metals, oil, gas, etc. You can also use it on any time frame that suits you best, from the 1-minute to the 1-hour charts. It works best on M1 or M5 timeframes.
Binary Option Strategy Trading rules
As always, to achieve good results, remember about proper money management. To be a profitable trader, you must master discipline, emotions, and psychology. It is crucial to know when and when not to trade. Avoid trading during unfavorable times and market conditions like low volume/volatility, beyond major sessions, exotic currency pairs, wider spread, etc.
- Identifying Important Levels
- The important levels are medium, strong (buyers and sellers), and verified zone.
- An important price zone is when medium and strong coincide with verified levels.
- Buy or Call Strategy
- Wait for the price to rebound from a significant level.
- Look for a ‘Buy’ arrow above a crucial support level from the Binary code indicator.
- Enter the trade at the opening of the next candle.
- Sell or Put Strategy
- Similarly, wait for a price rebound but from a resistance level.
- An arrow ‘Sell’ from the Binary code indicator below a significant resistance level signals an entry point.
- The trade is entered at the opening of the next candle.
For Forex traders using this trend action strategy, exit positions are guided by setting an initial stop loss below or above the identified levels. The profit target is typically set using a stop-loss ratio of 1:1.4 or is determined by the next support or resistance level.
For binary traders, set the expiration time to 3-5 candles. We recommend Deriv for binary options.
The Trend Action Strategy offers a structured and analytical approach to trading, particularly appealing to those who favor trend following and price level strategies. By combining support and resistance levels with the Sniper Market indicator, traders can enhance the reliability of their trading signals. As with any binary option strategy, it’s crucial for traders to understand the tools and rules involved thoroughly and to apply them consistently for optimal results.