Call/Put Binary Options Strategy
The Call/Put binary options trading strategy is a strategy that utilizes the Pro4x indicator to detect conditions where price may rise or fall. This is therefore a strategy for the Call/Put binary option.
MetaTrader4 Indicators: Pro4x Pivot Lines.ex4 (Press F8 to change the chart colour to the “Black and white” appearance to enable better visualization. Other settings are left in default settings).
Preferred Time Frame(s): 1 hour
Recommended Trading Sessions: Any time the signal appears on the charts.
Instruments: currency pairs, stocks, commodities
Trade Examples (Click the image for full size)
The strategy is to trade the price action off the pivot lines traced by the indicator. The indicator traces both daily and monthly pivot lines. Any of the lines can be used for this strategy. The aim is to detect where the price action is restrained by the trend lines i.e. the price must not close above or below the trend line for the signal to be valid.
The strategy therefore is a 3-candle setup:
- Signal candle: the candle that does the bounce on the pivot line
- Entry candle: the candle that from which the trade is made
- Expiry candle: the candle whose closing price is used as the expiry time.
Call Entry Rules:
A Call trade setup occurs when the following occurs:
- A bear candle hits a pivot line and does not close below it. This is the signal candle.
- If the open price of the entry candle is a few pips above the pivot line, allow the price action to pull back to the pivot line. When the candle touches the pivot, enter a CALL trade.
The expiry for this trade is 2 candles, which is equivalent to 2 hours. Many platforms offer this expiration time by default. It is also possible to close the trade manually when it is in profit for a reduced payout.
Put Entry Rules:
A PUT entry should be made when the following setup is seen on the charts:
- Allow price on an bull candle to hit a pivot line without closing above it.
- Allow the next candle to pull back to the pivot line, then open the PUT trade immediately it touches the pivot line.
The trade should last only 2 candles, which is equivalent to 2 hours of trading time. It is also possible to opt for the early closure when the trade is in profit. This however produces a lower payout.
About The Trading Indicator
The Pro4x.ex4 indicator is an excellent indicator for trading the Call/Put binary options. This is because it defines clear support and resistance areas, delineated by the pivot points.
The only precaution that traders should take is to perform the trade entry as stipulated so as to gain an advantage in terms of entry price being closest to key areas of support or resistance.