Stochastic forex trading strategy for Binary Options
The forex trading strategy system described by us is quite easy to use, despite the fact that it uses 2 indicators of technical analysis. In fact, it 's about the same algorithm, but only with different settings. The strategy uses the popular Stochastic indicator.
What are the 2 options for its settings? Everything is very simple - to filter out false signals and get more reliable entry points.
Basic asset: any
Time scale: any
Tools used: Stochastic (in 2 versions of settings), Japanese candles.
Description of forex trading strategy
This system uses 2 Stochastic indicators with different settings. For the first of them parameters are set to 21,9,9, and for the second one - 9,3,3. Why is this done? Primarily in order to obtain a longer and shorter Stochastic and use more accurate signals for input.
The longer Stochastic will be a better indication of what kind of movement is now in the market (play the role of a trend tool).
The shorter Stochastic will produce a large number of signals that will be smoothed longer.
The most important point to pay attention to when working with this system is finding price in the areas of overbought and resale. This is the main factor that allows the trader to make a decision to enter the market.
Note that the% K and% D curves must necessarily intersect. This is another important condition for obtaining more precise entry points. And such an intersection should be at the 2nd Stochastics.
Taking into account the difference in periods, in the 1st of them (what has a longer period), such intersection will occur later, at the moment of signal appearance. That 's what you need to make sure he 's true.
Signals forex trading strategy
When working with this forex trading strategy system, the number of trading signals will be less than if the trader were working with one Stochastic with standard settings. However, these signals will be more accurate. If you look closely at the chart above, the 2nd Stochastic shows a much larger number of points to enter. However, all of them, overwhelmingly, would not have produced the expected result.
The signal appears when a rather steep price reversal occurs at the top peak. The% K and% D curves intersect in the overbought area. At the same time, the Second Stochastic leaves this zone. The moment comes when you can purchase the Put option.
As for the boost signals, they are also presented at this indicator. All the same requirements must be met, but only in mirroring. That is, both Stochastika should be in the area of resale. To buy a contract, Stochastic must cross the 20 bottom-up mark with a smaller period.
As for the disadvantages, this forex trading strategy for binary options practically does not have them, except that the trader will have to wait more than usual appearance of signals. On the other hand, they will be more accurate and thanks to the long Stochastic, the trader will be able to see the big picture in the market.
This concludes the description of the Stochastics forex trading strategy system for binary options. As you can see, it 's really simple enough. But at the same time, shows very good results. From the description, those who are going to use such a strategy should be patient enough. Others are advised to try the pin bar strategy for starters.