Buyers Vs Sellers Binary Options Trading Strategy
The Buyers Vs Sellers (BVS) binary options trading strategy is based on the BVS.ex4 indicator.
This indicator is a customized volume indicator which measures market bias between buyers and sellers.
It uses a color-coding system to identify when buyers are in control and when sellers are dominating the market.
MetaTrader4 Indicators: BVS.ex4 (default setting); line tool.
Preferred Time Frame(s): Any
Recommended Trading Sessions: Any time the signal appears on the charts.
Assets Traded: Any
Buy Trade Example (Click the image for full size)
The strategy is to setup the BVS.ex4 indicator on the charts. A trend line is then drawn across the lows or the highs of price action wherever it is possible to do so. If the color of the indicator bars supports the expected price move following reversal at the trend lines, the trade is taken as follows:
CALL Entry Rules:
The trader should initiate a CALL trade if the following setup is seen on the charts.
- Candles make lows in such a way that at least three lows can be connected with a trend line.
- The bars of the RVS.ex4 indicator are green in color.
- Wait for another candle to bounce on the trend line and open the CALL trade on the bounce.
The trade lasts just two candles. Therefore the expiry must be set to correspond to the time frame of the chart. In this case, an M30 chart was used so expiry time is 1 hour.
- For this indicator, it is advised not to use the early closure as the margins for success can sometimes be quite small (see right of chart for second opportunity where trade succeeded only by very few pips).
PUT Entry Rules:
The trader should initiate a PUT trade if the following setup is seen on the charts.
- Candles form highs in such a way that at least three candle highs (marked 1,2,3 on the chart) can be connected with a trend line.
- The bars of the RVS.ex4 indicator are red in color.
- Wait for another candle to touch the trend line without breaking it and open the PUT trade at that point.
The trade expires after two candles. Set the expiration time of the trade using the time frame of the chart. This chart is an M30 chart which means that 1 candle is 30 minutes in length. So expiry will be set at 1 hour.
- The use of the early closure function should be avoided.
About The Trading Indicators
The BVS.ex4 indicator does not function as the main indicator in this strategy but as a confirmation. However this is an important confirmation because it shows whether the market sentiment favours the buyers (CALL TRADE) or the sellers (PUT TRADE).
This binary strategy can be easily combined with more Forex indicators that work for binary trading.