EURUSD Options Strategy

Thinking about how to make money on binary options, beginners want to cover everything, as many assets, strategies and signals as possible. With a lack of experience, this only leads to losses. More profit can be obtained by trading only one asset, such as EUR/USD — the main currency pair of the forex market.

Strategy characteristics

Type:Trend.
Timeframe:Any in the range M1-M5. In our case, M1 is used, but with an increasing period of analysis, the accuracy of the signal is increasing.
Trading asset:Any currency pair. The main requirement is a fixed (2-3 points) spread and no hidden fees.
Trading time:All Forex trading sessions.
Percentage premium option:Not less than 70-75%.

Used indicators

The strategy uses two technical indicators.

Donchian Channel (DC) is the horizontal direction of the DC lines that confirms the presence of a flat, the breakdown of central lines will be the binary signal of its end. If the range is wide enough, you can open options to roll back from the borders. This method is recommended only for experienced traders!

The Donchian indicator is not included in the basic set of trading platforms. But it can easily be found for free on the Internet.

Stochastic Momentum Index (SMI) is an interesting interpretation of the popular Stochastic Oscillator. In the standard version, he calculates how close the current price is. In turn, SMI shows how close is closer to the midpoint of the High/Low range and is thus more streamlined. The indicator is traded, like the usual Stochastic: exit from overbought/oversold, divergence. It is not included in all trading terminals!

After installing the tools, the terminal’s working window looks like this:

Binary options signals:

RISE (CALL) option. The price pushes away from the lower border of Donchian Channel or breaks its middle line from bottom to top. The Stochastic Momentum Index is above zero levels or in the overbought area.

FALL (PUT) option. Opposite conditions — the price has not overcome the upper limit of Donchian Channel or breaks the middle from top to bottom. The Stochastic Momentum Index also goes down to oversell.

Open a trade on the next candle after binary signals. Time of expiration of options has to be not less than 5-7 minutes even if as a working timeframe it is chosen of minute.

Recommendations for use:

The «narrower» the Donchian Channel, the higher the likelihood of strong movement after flat completion. The opposite situation is necessary for trading on the edge of borders: the corridor must be at least 30-40 points, otherwise, the options will be unprofitable.

Time of expiration can be increased up to 5-7 minutes if the steady trend is observed. Also, during such periods, it is possible to open several options with different validity periods to take away a maximum of the movement at minimal risk. If the broker gives the chance to close the option until expiration, then surely we fix the transaction (even if it is in profit!) at the emergence of an opposite binary options trading signal!

During the publication of important fundamental news and statistics, we do not open options 30 minutes before the news and 30 minutes after the publication, cautious traders can close current deals. To control the events, we use the economic calendar included in the all popular binary trading platform!

If you look closely at the chart, you will see that almost always the conditions for options do not arise at the same time and there is a gap between the signals. How to make money on binary options: wait or still enter at the first sign of a reversal? And which indicator will be the leading signal?

There is no clear answer; it all depends on the characteristics of the asset, the timeframe and the current situation. But if you are a beginner, you need to wait for all the conditions of the strategy to be met. If the price has returned to the channel and is near the central line, make sure that the movement continues, enter at least the next up/down candle of the average Donchian.

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