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Channel Trend is a strategy for binary options that combines systematic trading approaches of technical analysis and indicator-type strategies.
Objectively, it is worth saying that this strategy is not the grail of the financial market and does not allow you to earn all the money in the world, but its efficiency in 85% and stability of work allows you to get high results in the binary market.
The system is based on the principle of drawing up contracts in price channels using auxiliary indicators. All the details of the system operation are further in this material.
Trading and technical requirements of the system
The construction of channels and the use of technical indicators put forward some requirements for the trading platform. In addition, we need to properly manage risks and working capital.
Based on this, we will need a certain list of trading and technical capabilities of the terminal of the brokerage company with which the trader cooperates:
- Ability to apply indicators to a trading chart;
- Availability of graphic services on the broker's platform;
- Minimum possible trading conditions;
- Fast execution of orders;
- Accurate quotes of the underlying asset.
In terms of a binary options broker ideally suited for such parameters, you can consider here this company, the list of services and trading conditions of which includes:
- Professional platform for binary trading with integrated sets of graphical services and indicators;
- Trading conditions with minimum values suitable for any trader: the initial value of transactions from 5 USD, the minimum available trading deposit from 100 USD;
- Highly accurate quotes of underlying assets;
- Order processing in 1.7 ms.
In addition, the company offers a wide range of support services, among which professional training and effective daily analytics stand out.
You can read a detailed review of this broker here.
Read also - Binary options trading system: Profi Signal
Channel Trend binary options strategy template
First, we install strategy indicators on the quotes chart: RSI and MACD in the standard configuration, then we build a channel in which the price fluctuates using the specialized service of the Binomo platform.
The principle of constructing a channel is classic based on the highs and lows of quotes. As a result, the trading chart of the underlying asset will acquire the following markup:
This combination of analysis tools allows you to get a clearly formalized trading signal for the execution of a binary option.
In the operation of the Channel Trend strategy, indicators act as a filter for false signals, which allows you to increase the efficiency of channel trading and receive more pronounced trading signals.
Trading signals by strategy
Signals for a bet UP:
1. The RSI indicator demonstrates an upward trend in building a moving average;
2. The histogram of the MACD indicator began to build above the zero level, and the oscillator lines crossed in the upward direction;
3. The price of the asset has touched the lower border of the trend channel.
Signals for a bet WAY DOWN:
1. The RSI indicator shows the downward dynamics of the construction of the moving average;
2. The histogram of the MACD indicator begins to build below the zero level, and the oscillator lines cross in the downward direction;
3. The price of the asset touches the upper border of the trend channel.
- Making orders on the signals of the system should be carried out until the breakdown of one of the channel boundaries.
After the formation of such a situation on the market, the trend channel loses its relevance and in order to continue using the system, it is necessary to build a new channel for quotes fluctuations:
At the same time, the breakdown of the channel can also be used as an effective signal for the execution of a short-term option.
Choice of expiration
The duration of the trading strategy signal allows you to use contracts with an expiration of up to 5 minutes in trading. Such a period of time allows the quotes of the asset to significantly move away from the position registration level and does not allow the price to return to the zone, which will bring losses on the transaction.
The Channel Trend binary options strategy, despite the high level of signal efficiency, sometimes fails and brings losses.
In order for the level of losses not to destroy the deposit, it is necessary to use a small amount of funds to draw up one contract. The optimal risk level for trading on the system is 3% of the amount of funds on the trading deposit.