«Trinity» - New strategy for binary options

 

Binary traders, especially beginners, are in constant search for new techniques. But the search result in huge collections of strategies is not always profitable, especially if it is assumed to be scalping on M1-M5 timeframes. Meanwhile, professional players and trading signal services, such as vfxAlert, use simple and time-tested combinations of standard tools, such as in the «Trinity» strategy.

Strategy characteristics  
Type: Trend
Timeframe: Any in the range M1-D1. In our case, M1 is used, but with an increasing period of analysis, the accuracy of the signal increases.
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:
  • Simple (SMA) moving average with a period of 10.
Classic trend indicator, which will determine the general direction of the scalping trend. The strategy is not intended for trading during flat periods. We trade only if the range is between at least 15-25 points!
  • RSI with a period of 14 and an additional level of 50.
Trend indicators must necessarily be confirmed by at least one oscillator indicating an overbought condition when buyers can no longer move the price up or oversold, where there is almost no one in the market to sell at lower prices.
  • Standard MACD (12,26,9).
This indicator works both as a trend and as an oscillator instrument, so it will be the final signal to open an option. After installing the tools, the terminal's working window looks like this: Trading signals Let's start with the CALL option for the expected growth of the currency pair. To open a transaction, the following conditions are necessary:
  • RSI line 50 level crossing upwards;
  • MACD also crosses its zero line from the bottom top or its histogram turns up after a new local minimum (signal of medium strength);
  • price moves above the moving average.
The option opens on the second candle above SMA (10) with an expiration time of 5-7 minutes. The signal strength increases if the breakout candle (or most of it) is above the Moving Average. Opposite conditions are required for a PUT option: the price moves below SMA, RSI breaks down from 50 downwards, MACD also moves upwards. As you can see, everything is quite simple, and you can quickly start trading, but you should consider several factors affecting the final result:
  • We exclude the periods of the release of strong fundamental news when technical indicators give only false signals. Binary options are not intended for news trading at all since it is impossible to open a pending order, and it is very difficult to predict where (and most importantly, when!) will follow the first impulse of a market. Choose periods of intraday with a minimum news background and average volatility. Signals occur quite often and can be earned with minimal risk.
  • As can be seen from the graph, the signals from RSI and MACD are mutually late, but there is nothing unusual in this. The delay in varying degrees is present in all technical tools, but their combined use in the strategy makes it possible to minimize this problem and enter the market at the optimal point. For more details on how the delay is compensated, see our video on the “Trinity” strategy.
  • Expiration term. Look to steer a middle course: too short (1-2 minutes) and too long (10-15 minutes) option life are considered dangerous. In the first case, the price risks «not having time» to go in the right direction - we get a loss. In the second, the market will have time to turn around, which again gives a negative result. Do not forget that the strategy is scalping, so try not to go beyond the range of 5-7 minutes.
One more thing. After strong trends, RSI, like any other overbought/oversold oscillator, can “trample” for a long time in critical zones or around level 50, without crossing it. At the same time, MACD and SMA can give strong signals to open options. To take such signals to work or not, everyone should decide for himself, but still, it is better for beginners to wait for a fully formed entry point, according to which the «Trinity» strategy gives about 70-75% of successful transactions.