Correlation Call/Put Binary Options Strategy
The correlation Call/Put binary options trading strategy is executed using the Correlation-mt4-indicator.ex4 indicator. This indicator traces trend lines across areas of minor support and resistance, and uses directional arrows to point to where a signal can be traded.
This is the original strategy and is used to trade the Call/Put trade. The beauty of the indicator is its ability to spot several trade opportunities on an intraday basis.
- MetaTrader4 Indicators: Correlation-mt4-indicator.ex4 indicator (default setting).
- Preferred Time Frame(s): Any
- Recommended Trading Sessions: Any time. Depends on when the indicator signal appears on the chart.
- Assets Traded: All asset classes can be traded with this strategy.
Call Trade Example (Click the image for full size)
The Correlation-mt4-indicator.ex4 indicator will draw trend lines across areas of minor support and resistance and also trace direction arrows which can point upwards (from support) and downwards (from resistance). The Call/Put trade is based on direction ONLY.
The indicator has two components:
- The trend line and direction arrows, which appear on the chart itself.
- The Spearman Correlation lines, which appear on the indicator window.
The basis of the strategy is to look for areas where the price reverses off the support or resistance lines, followed by the appearance of the direction arrows as well as the cross of the Spearman lines along with direction arrows in the indicator window. The setups are illustrated below.
CALL ENTRY RULES
The following illustrates a Call trade setup:
- Price reverses upwards from a support line followed by the appearance of a direction arrow which points upwards.
- The confirmation for this reversal is the appearance of the up-pointing arrows as well as the cross of the Spearman correlation lines in an oversold region of the indicator window (see chart).
- Select the CALL option once the arrow appears.
Expiry for CALL Trade
Due to the fact that the trade is opened when the entry candle is already open, time the trade in such a way that it is either closed manually at the close of the 2nd candle, or you can set an expiry which corresponds to the time frame of the chart. This example used a 30-minute time chart, so expiry can be set at 30 minutes.
PUT ENTRY RULES
The following illustrates a Put trade setup:
- Price reverses downwards from a resistance line followed by the appearance of a direction arrow which points downwards.
- The confirmation for this reversal is the appearance of the down-pointing arrows as well as the cross of the Spearman correlation lines in an overbought region of the indicator window (see chart).
- Select the PUT option once the arrow appears.
Expiry for PUT Trade
An expiry time which corresponds to the time frame of the chart should be used. The trade can also be closed early when it is in profit territory.
About The Trading Indicator
The Correlation-mt4-indicator.ex4 indicator draws clear trend lines around support and resistance. The appearance of the arrows on both the chart itself and the indicator window further confirms the move, allowing traders to take the appropriate trade action.