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The Double Cross Strategy

The binary options traders value the systems that provide not only the main signal, but also its confirmation. One of the best ways to design such a system is use at least two indicators whose signals in synchrony. The ideal scenario is to use one of the trending instruments installed on your chart and, along with an oscillator. A signal about price movement in one of the directions in such a combination of indicators is considered especially reliable.

This article will discuss an effective trading strategy “Double Cross” in the digital options market. The strategy is built on two popular advisors – MA and Stochastic, which you can find in the Pocket Option and other trading platforms.

The two central advantages of this strategy are its simplicity and efficiency. Impressively, the trading efficiency of the system reaches 90%. Moreover, it is suitable for almost any asset and can be used on the lowest time frames, which is most important for the binary options market.

How to set up parameters?

As mentioned above, the strategy is universal and works for all types of assets. It depends on the preference of the trader and the trading session.

Two Moving Averages. Even though it is recommended to set the timeframe between M1 and M15, we suggest M5 because it is  best suited for our purpose. On the one hand, transactions are completed quite quickly and with a short expiration period. On the other hand, indicators are less susceptible to market noise, which means the risks of making a mistake when buying an option are lower.

Now let’s move on to directly setting up the tools. Moving Average needs to be set to 2, use simple type and choose the 5 and 10 period. It is advisable to use different colors so that it is visually clear where is fast and where is slow MAs.

Stochastic. Taking into account the fact that we are working on lower time intervals, we configure it as follows: %K – 5, %B – 3, slowdown – 3. For higher time frames, the parameters are 14, 5 and 3, respectively.

How to trade using the Double Cross strategy?

Two moving averages act as an improvised trend line. When the trend is stable, they fit in its direction and move in parallel. Meanwhile, as soon as a reversal or correction is planned, one of the MAs (with a period of 5) will react to this event faster and cross the second moving average in the direction of the future movement. This signal will be used in the strategy.

Stochastic also has fast and slow lines. Their intersection in one of the directions acts as a similar signal.

The CALL option must be purchased after the lines on both indicators cross in the upward direction.

The PUT option is done when the lines cross from top to bottom.

The expiration period in the case of trading on the M5 timeframe will be 10 minutes.

Please note that Stochastic reacts to future price changes a little earlier than MA. This feature can also be used in trading, receiving a warning signal, and already preparing to buy a contract when it is confirmed.

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