When anyone starts trading using either FX or Binary Options they want the same result; a quick win. There are many strategies that once we have mastered the basics allow us to profit in a very short time frame.
We discussed the 60-second strategy already, now we will take a look at 5-minute strategies.
They use more or less known indicators to interpret charts and predict future prices and trends.
You can combine them however you want to, but keep it simple. Charts with many indicators and signals lead to confusion. You should always check efficiency of the strategy before using real money. We recommend uTrader broker, with its risk-free demo account.
Binary Buzz Kill
In the case of the Binary Buzz Kill strategy, we will use 4 indicators, you can download them here. These are:
- RSS 3TF ALERT_22;
- DSS Bressert;
When red line is against the arrow we don’t trade. If the arrow is not the same as DSS indicator we don’t trade – we have to wait for signals or next candle confirming direction.
When BDFXtrender is yellow we don’t trade. This line shows that market is going in both direction. If you decide to trade, be sure that you are trading in direction of other indicators.
Tarzan shows long term price trend. Tarzan combined with BDFXtrender defines time frames in which we can operate. If we have to deal within a new trend, we will use longer time frames.
This strategy best works on pairs like EURUSD, GBPUSD, AUDUSD and USDCHF.
Basic rules of trading using this strategy are really simple:
- We enter positions only when RSI 3TF_Alert_22 is giving signals;
- The most important indicator is the red line with yellow dots on the RSS indicator, If the indicator is creating warning point, we check if the red line is above or below the dotted line. If there is a buy signal we have to check if red line moves up and the same we do in case of sell signal.
On the screen we can see that red line is clearly above the middle one. It is good signal. I marked moment of break with an arrow:
This is also good signal:
That is an example of good and bad signal. The first one is right. Red line is clearly above the middle. The second one shows that bullish trend is ended and you can lose if you open position (if you want to enter anyway, check direction of DSS). Don’t forget about this rule.
Good bearish trend:
If the arrow is not consistent with DSS, do not open position, wait until everything will be right or wait for another candle confirming direction.
Do not trade if the indicators are not consistent. DSS shows bullish trend and RSS bearish one and DSS always wins. Wait for consistent signal.
If BDFXtrender is yellow, do not trade. It shows that the market is in a sideways trend or it is nervous.
Tarzan shows long term trend. If it is beginning of new trend, I will buy a CALL for 1 hour option using this indicator. If there is a new trend on BDFXtrender with confirmation on DSS I would play 30 minutes option.
The screen above shows 30 minute option. I entered after close of bearish candle, which is marked by arrow. This is of course M5 time frame on the chart – this is the one used by the signal. It is more stable than M1and faster than M15.
I use 15 minutes options or smaller when DSS is falling. It has to be consistent with RSS 3TF.
When you trade, look at the BDF behavior. Observation and practice let you better understand connections between indicators.
You should always test some tactics for a longer time on demo before entering real market. You can check this strategy with uTrader; binary options broker with risk-free account. Take notice that RSS 3TF does not sound alarms, so you have to check the chart every 5 minutes before candle will be closed.