Freedom Binary Options Trading System

The binary options trading strategy based on the MTF forex freedom bar indicator was built to trade price action. However, our own study of this indicator has provided a much needed modification to enable it to be used to trade the binary options market. This strategy is what is discussed below.

Chart Setup

  • MetaTrader4 Indicators: MTF_Forex_Freedom_Bar.ex4 indicator (default setting)
  • Preferred Time Frame(s): 15 minutes, 30 minutes and 1 hour
  • Recommended Trading Sessions: Any time. Depends on when the indicator signal appears on the chart.
  • Assets Traded: Best used on currencies as the indicator was optimized for currency trading.

Download

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Buy Call Trade Example (Click the image for full size)

FXfreedom_Call-binary-options-system

Strategy

The MTF_Forex_Freedom_Bar.ex4 indicator paints a number of boxes in the indicator window. These boxes could either be blue (bullish) or red (bearish). The boxes are drawn for the M15, M30, H1 and H4 charts.

To take on this trade, and area of minor support or resistance is identified and a trend line drawn to connect the lows or highs of price action. The best setup is seen when the next candle attempts a pullback on the key level.

If the colour of the box corresponds to the bounce direction of the candle from the key level, the trade is executed, matching the time frames of the chart.

CALL ENTRY RULES

A CALL trade is setup when the following occurs:

  • Pick a time frame, then watch for the colour of the box in step 3. Identify a minor support area and draw a support line to connect the price lows.
  • Allow a candle to test the support line. This candle must not break the support i.e. it must close above the support line after touching it.
  • Allow the next candle to pull back on the support. If the box on the pullback candle is blue, enter a CALL trade.

Expiry for CALL Trade

Set the expiry time of the trade to close at the closing price of the next candle. This puts expiration time at 2 candle lengths. For this trade example taken on a 15-minut chart, this is equivalent to 30 minutes.

Early Exit Strategy

You can also close the trade early when the trade is in profit for a smaller payout.

Precautions: Even a single pip is important. Always allow pull backs as described above so you get a price advantage on your trade entry.

PUT ENTRY RULES

A PUT trade is setup when the following occurs:

  • Pick a time frame, then watch for the colour of the box in step 3. Identify a minor resistance area and draw a line to connect the price highs.
  • Allow a candle to test the resistance line. This candle must not break the resistance i.e. it must close below the resistance line after touching it.
  • Allow the next candle to pull back up to the resistance line. If the box on the pullback candle is red, enter a PUT trade.

FXfreedom_Call-binary-options-strategy

Expiry for PUT Trade

Set the expiry time of the trade to close at the closing price of the next candle. This example used a 1 hour chart, hence the expiration here is 2 hours.

Early Exit Strategy

You can also close the trade early when the trade is in profit for a smaller payout.

Precautions: Even a single pip is important. Always allow pull backs as described above so you get a price advantage on your trade entry.

Free Download

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About The Trading Indicators

Study the chart properly to see the various points at which the MTF_Forex_Freedom_Bar.ex4 indicator presents trade opportunities. Each box must be matched to the time frame – very important.

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