The main advantage of binary options is that you do not need to predict the distance the price will travel. The success does not depend on points. It depends on the time of the transaction. Traders device different short, medium and long-term trading strategies and it seems like the medium-term trading strategies are the most popular.
The medium-term trading strategy implies the execution of transactions and the planning of positions take several days ahead, using various factors, such as fundamental analysis and technical indicators of the market.
The best timeframe to make money is the medium from 30 minutes to 4 hours. Why? First of all, it is less stressful and emotional. You do not have to react to turbo regime and feel chaotic. With medium timeframes you are more in control and make an informed decision. Secondly, you can weed out and market noise.
In this article, you will learn about the medium-term Open Way strategy. It is based on clear signals generated by three indicators. Experienced and new traders can use it while trading on the Pocket Option platform.
How to set up the indicators for the Open Way Strategy
We need three indicators: MA, Alligator and RSI. A moving average (MA) is a technical analysis indicator that helps smooth out price action by filtering out the “noise” from random price fluctuations. The Williams Alligator indicator is a technical analysis tool that uses smoothed moving averages. The Relative Strength Index (RSI) is a momentum indicator that measures the magnitude of recent price changes to analyze overbought or oversold market.
Let us start with using candlestick chart and timeframe H1. The settings should be as follows:
- Set MA period at 200;
- Keep the default setting 14 for RSI. Change the “OVER” from 30/70 to 20/80;
- Keep default parameters (13, 8, 8, 5, 5, 3) for Alligator.
The above-recommended settings are well-calculated and time-tested: nothing is left to chance. 200 MA is a trend line, the RSI indicates the strength of trend, the Alligator indicates its relevance and duration.
How to trade with the Open Way Strategy
To implement the strategy, you should wait for the following signals:
- CALL when the trend is up (candles are located above the MA 200), the price is above the previous peak, the RSI signal line is not yet in the overbought zone (above 80), and Alligator is hunting (all the lines go in the same direction and do not intersect).
- PUT when the situation is exactly the opposite (except the Alligator): the trend is down, the price is below the previous peak, the RSI is above the 20 level, and the chart is below MA 200.
The expiration must be set at least 2 hours.
The Open Way strategy combines three technical analysis indicators to build a reliable trading strategy so you can receive a very strong system that will give accurate signals to open trading positions.