Trading financial options come with one of two payoff options if the contract is held until expiration: a fixed amount or nothing at all. That’s why they’re called binary options – because there is no other settlement possible. The premise behind a binary option is a simple yes or no. Traders place trades based on whether they believe the answer is yes or no, making it one of the simplest ways to trade.
Perhaps, because it is very simple, most people think that trading binary options means easy profits and no need for special training. As a matter of fact, they are partly right.
Some risky traders conduct their transactions in a “bet” style hoping to get rich by chance. Even in such a case, it is recommended to use some basic rules like the Martingale method, probability theory and mathematical expectation. Risky traders like to make dozens of small deals during one trading session.
Professional traders belong to a different category of “informed decisions trading”, they trade on binary options as the professionals do on stock and commodities markets. The big question is if it is possible to trade with a well-defined trading strategy without Martingale?
The answer is yes, but you need to know tools for technical analysis because the binary options market does not differ from any other market. It means that you can read and analyze to make informed decisions. Read the description of Triple Power Strategy to learn more about technical analysis in binary options trading.
Introduction to the Triple Power Strategy
The system got its name for a reason: it is based on three RSI (Relative Strength Index). Everybody knows that three is better than one. However, some new traders can ask: “What is special in using three RSI when they generate the same signals?”
In fact, three indexes will be used with different periods. The Triple Power Strategy uses three RSI to make a powerful filter for weeding out false signals. Let us tell you more about another indisputable advantage of the triple power – you can use this strategy at any time frame without changing the default parameters.
For the settings of three RSIs, you set three periods to values of 5, 14 and 21. When you are done, you will see three almost identical oscillator windows with different signal lines.
How to trade with the “Triple Power” strategy
Congratulations! You are set up for trading with the Triple Power Strategy. Before you start, you should learn a couple of tricks.
First of all, do not expect frequent signals. You should understand that trades will appear very rarely. Sometimes a day may pass without any signal, especially if you trade on a single asset. It means that you do not need to choose the high and medium timeframes. M15 is the best way to work with this system.
Secondly, it is possible to trade on any asset. The strategy does not depend on volatility and time of day. Considering that signals in transactions occur quite seldom, it is possible to track 3-4 assets simultaneously.
Do not be discouraged because the rarity of the signal is more than compensated by the high accuracy. Almost every trade will bring you a profit, with the exception of variants with impulse speculative moves. Therefore, it is not recommended to use this strategy at the time of news releases.
The CALL option is done when all three signal movings are out of oversold conditions.
The PUT option is done when the signal lines on the three RSIs have left the overbought zone.
The recommended expiration is a formation of 3-5 candles.
Traders place trades based on whether they believe the answer is yes or no, making it one of the simplest financial assets to trade. This simplicity has resulted in broad appeal among traders and newcomers to the financial markets. As simple as it may seem, traders should fully understand how binary options work, what markets and time frames they can trade with binary options, the advantages, and the disadvantages of these products, and which companies are legally authorized to provide binary options to traders.