Experienced binary options traders know that a combination of different timeframes and periods might give much more information than one single chart. If you traded with the technical analysis only, you would assess the trend’s momentum with different angles of view in order to increase trading algorithms’ efficiency and thus maximise profits. Some traders to not run for a large number of profitable short-term deals, but prefer focusing on a more extended period with one single entry as the high payout percentage suggests comparatively handsome profits even with one single pip of a price change. On the other side of the coin, such a trading approach is long-term, so patience is required to be profitable at the end of the month.
Awesome and MACD Binary Options Trading System is based on one single timeframe - four hours. At the same time, it’s suitable for any asset class to trade with. The primary technical tool to monitor for the trend’s direction is the MACD trend indicator, but its settings have to be modified to 5,7,4 instead of 12,26,9. That’s made to squeeze the frequency of price fluctuations and increase the number of entry signals. So, when MACD histogram is above the Zero Line, we consider buying call options. Also, when it’s below the Zero Line, we get ready to purchase put options. The other technical tool will show us when should we pull the trigger.
Awesome Oscillator is a product of Bill Williams; the same guy who developed Williams %R oscillator. The main difference is that Awesome Oscillator does not show overbought/oversold levels of the price, but it indicates the trend’s momentum with its histogram. The mathematical formula is based on a principle of comparing different periods. On the short-term, it takes into account the 5-bars simple moving average. On the medium-term perspective, it calculates mid-points of the 34-bar exponential moving average. Such a combination allows the indicator to point to the next price direction with comparatively high likelihood. The most important event is when Awesome Oscillator’s histogram crosses the Zero Level, which shows the change in the market sentiment and trend momentum.
The entry condition is as follows. If MACD histogram is above the Zero Level and Awesome Oscillator crossed the Zero Level from below, then we buy call options. If MACD is negative and Awesome Oscillator drops below the Zero Line, then we buy put options. The number of entries, as well as the sequence of trading deals, must be determined by individual trading strategy. Speculators can use trading cycles, buying options in the same direction several times in a row, or use the buy-and-hold trading technique, targeting a more extended period. If a different signal occurred, then traders should stop buying options in the same direction. An example of the trading system in action is shown below.
