The trading strategy “Point-to-Point” is ideal for electronic contracts. Even new trader can use it does not require in-depth knowledge of financial markets and allows trading options with a short expiration date. The strategy “Point-to-Point ” is based on the two most popular indicators: Parabolic SAR and Stochastic. By the way, the strategy got its name after points in the Parabolic. You can trade any high volatile assets with Point-to-Point strategy.
As a trader at Pocket Option platform, you will not have to look for tools and instruments. The entire toolkit is available in the standard account.
How to set up?
If you want to use this strategy, you must prepare and set up parameter. First, select an asset with high volatility: EUR, USD and GBP. Some traders prefer cryptocurrencies because you can trade them on weekends.
After choosing an asset, set the chart type to Japanese candlesticks and switch the timeframe from M1 to M5.
Now, let us set the indicators. Go to the menu and click on the name of the corresponding advisor.
The recommended parameters are 0.02 for Parabolic SAR, 14 and 3 for Stochastic with 2 decelerations.
Congratulations! You are ready. Let us learn how to start looking for a signal to buy a contract.
How to trade with the”Point to Point” strategy?
The basis of the strategy is in reading the Parabolic Points and Stochastic zones. As you know, there are 2 zones in Stochastic: overbought (from 80 to 100) and oversold (from 0 to 20).
According to the “Point to point” strategy, the CALL option should be purchased when the last point of the Parabolic is under the candlestick, and the Stochastic signal lines leave the oversold zone.
According to the “Point to point” strategy, the PUT contract must be executed when the Parabolic point appears above the candlestick and the oscillator lines leave the overbought zone.
The recommended expiration is two bars.
For example, if you trade for 5 minutes, then the contract duration will be 10 minutes.
According to the statistics, the percentage of successful deals on the “Point to Point” strategy reaches 85%. Professional traders do not recommend using more than 3% of the total deposit in one transaction. Do not get excited and trade binary options with a cold head. This is the only way you will be able to achieve success in the financial markets.
In general, trading on lower timeframes and using high volatile assets, you will be able to make up to 30 purchases of contracts per day as part of the Point-to-Point strategy. Considering the percentage of successful transactions, this strategy, if all the rules are followed, will be able to bring you tangible profits.