5 Minute Binary Options Strategy
For lovers of the ultra-short trades, here is a strategy for you for the M5 charts. This binary option trading strategy is based on the BBAlert_Arrows.ex4 indicator and gets support from another indicator. The accuracy factor with this strategy is about 70%, meaning that in ten trades, you can expect to win seven of them.
- MetaTrader4 Indicators: BBAlert_Arrows.ex4 indicator (default setting); BinaryTrendSniper.ex4 (default settings)
- Preferred Time Frame(s): 5 minutes (M5) chart.
- Recommended Trading Sessions: Any time. Depends on when the indicator signal appears on the chart.
- Currency Pairs: Any. It can also be used on other asset classes.
TRADE Example (click the image for full size):
The BBAlert_Arrows.ex4 indicator will draw up-pointing arrows for a Call signal and down-pointing arrows for a Put signal. Arrow colour is yellow, irrespective of direction. The strategy is to trade the signal only when there is a confirmation from the BinaryTrendSniper.ex4 indicator.
Each trade is a double-candle setup:
- Signal candle, which is where the arrow signal appears. This candle must be allowed to close to be sure the arrow signal does not repaint.
- The 2nd candle is both for trade entry and expiry, with entry price being the open price and expiry value being the closing price of the candle. Since the chart is an M5 chart, the trade will last only 5 minutes.
CALL ENTRY RULES
A CALL trade is setup when the following occurs:
- First, ensure that the BinaryTrendSniper indicator is green in colour.
- Watch out for an UP arrow on a candle bar. Once the candle has closed with the UP arrow showing on it, set a CALL trade immediately the next candle opens.
Expiry for CALL Trade
The expiry of the trade is the closing price of the entry candle. Some forex platforms have a Call/Put trade with a 5-minute expiry on their platforms (the Short Term trade). This is the trade type to use. If your platform does not feature this option, simply close the trade at the end of 5 minutes.
PUT ENTRY RULES
A PUT trade is setup when the following occurs:
- The BinaryTrendSniper.ex4 indicator should be red in colour.
- Wait for a DOWN arrow to form on a candle. When this candle closes and the arrow is in place, open a PUT trade as the next candle opens.
Expiry for PUT Trade
This is a 5-minute trade, so either use the Short Term trade (with 5 minutes expiry option) to execute this strategy, or close the trade once 5 minutes are up.
Precautions: For either the CALL or PUT trade, ensure that the trades are opened as the next candle opens, and closed at the close of the same candle. The margins for error are very small; entries and exits must be very precise.
About The Trading Indicators
The BBAlert_Arrows.ex4 indicator, like all indicators that show arrow signals, is very likely to repaint. Trading with repainted arrows can be avoided if the candle is allowed to close so the arrow is either formed or not. The decision can then be taken on whether to trade or not.