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Easy Binary Strategy on Rectangle Breakouts: Square is a great solution for a simple novice trader to try their hand at binary options trading.
The simple rules of the trading system and risk management prove once again that there are strategies that are really easy!
According to professional traders, combined strategies based on the principles of technical analysis and indicator algorithms are more effective than using each type of strategy separately.
Against this background, we offer you a Square trading strategy that works on indicator algorithms in the patterns of technical analysis.
It's all about the signals of this technique, the accuracy of which allows you to increase your trading capital by about 200% weekly. For a simple trading strategy like Square, this is simply fantastic.
Setting up the Square trading system
So, for trading using this method, it is necessary to apply a special markup to the trading chart. At this stage, it immediately becomes necessary to choose a brokerage company whose trading terminal would have all the technical capabilities for this.
The main requirements for the trading terminal is the presence of a built-in indicator set with the necessary positions, and special graphical tools.
And the broker itself, at the same time, must provide favorable conditions for capital management - the minimum parameters for starting trading and making trading operations, as well as an excellent choice of underlying assets with increased payouts on options.
So to say, quite feasible conditions, but only a few brokers are really able to provide their clients with this list of services.
Read also - Attack Trend options trading system
Let us single out among them only this broker which provides a wider range of features such as:
- A high-tech terminal with professional technical tools, including a set of indicators, a graphical analysis set and the most accurate asset quotes;
- Loyal trading conditions that allow you to start trading with 100 USD on a deposit and make trades worth from 5 USD;
- Underlying assets of all types, the payout level for which on options reaches 87%;
- Professional analytical support;
- Quality free education program;
- Service of fast and convenient profit monetization!
So, given the above parameters, this broker is quite worthy to become your partner for successful trading on the options exchange.
Now let's move on to creating a special technical and analytical layout of the Square trading strategy on the chart.
To do this, you first need to place the MACD indicator on the asset chart in the classic configuration, plus the modified RSI indicator with the value of 21 set for the moving average, and 50 for the trend level.
This will be the first part of the template. Now let's move on to the second one.
It is necessary to determine the area on the chart where the quotes narrowed the amplitude of their fluctuations as much as possible, forming a kind of rectangle with the levels of their extremums. This area must be designated using the graphic service function of the same name.
It is on the selected section of the chart that trading signals will be formed. After that, the price chart will look like this:
Definition of signals on the Square system
Deal UP we conclude with the following combination of signals:
1. The price of the asset breaks through the upper rectangular border;
2. A divergence appears in the upward direction of the MACD indicator lines;
3. The construction of the RSI indicator line above the 50th level begins.
As soon as these conditions are met, we buy the option. CALL (up)
Deal WAY DOWN consists of the following signals:
1. There is a breakdown by the price of the asset of the lower border of the rectangle;
2. The lines of the MACD indicator diverge in the lower direction;
3. RSI indicator lines start building below the 50th level.
As soon as the conditions are met, we buy a downgrade option PUT (way down)
Working indicators in the Square trading strategy determine short-term impulses of trend fluctuations on the tick chart, which means that the most suitable expiration period for contracts will be 1-2 minutes.
It is at this time that the Square method works as efficiently as possible, because over the set period, the quotes can move away for a sufficient segment of the chart to make a profit on a completed transaction.
Binary trading according to such a short-term strategy is considered a high-frequency trading method, which is characterized by an increased level of trading risks. This means that in order to protect your capital from significant losses, it is necessary to create an advantageous balance between profit and loss - to set a financial limit for each transaction.
So, it is best that the amount of the executed transaction is not higher than 3% of the amount of working capital on the deposit. But if you apply this technique with a small amount in the trading account, then each bid should generally be the smallest.