Fibonacci Touch Binary Options Strategy
This touch/no touch binary options strategy is traded using the QuickFib.ex4 indicator. This is a modified Fibonacci-based indicator which traces trend lines in addition to the regular Fibonacci retracement lines.
- MetaTrader4 Indicators: QuickFib.ex4 indicator (default setting).
- Preferred Time Frame(s): 5 minutes
- Recommended Trading Sessions: Any time. Depends on when the indicator signal appears on the chart.
- Instruments: Any (forex pairs, stocks, commodities)
TRADE Example (click the image for full size):
The QuickFib.ex4 indicator will draw trend lines across the price highs and lows, and project same into the future. It will also draw regular Fibonacci retracement lines on the chart. We shall use the retracement lines as a gauge of whether price action will touch the strike price or not.
This strategy is unique as it features an opportunity to trade on short term charts.
TOUCH ENTRY RULES
If the trader intends to select Touch for the trade, the following is done:
- Check to see whether the strike price given for the TOUCH/NO TOUCH trade is within the boundary created by the upper and lower trend line, or in between the relevant Fibonacci retracement areas.
- The price action is expected to move between both trend lines for some time. Therefore, the trader should select TOUCH if the strike price is located within the boundaries discussed above.
Expiry for TOUCH Trade
The trader needs the trade to be open for as long as possible so that there is a good chance of the strike price being hit. Since the 5 minute chart is used to setup this trade, the expiry time should be set between 30 minutes and 45 minutes.
Early Exit Strategy
You can also close the trade early when the trade is in profit for a smaller payout.
This trade is specifically structured for a TOUCH outcome. There is no allowance for a NO TOUCH option.
About The Trading Indicator
The QuickFib.ex4 indicator is unique in its ability to draw clear trend lines that define the boundaries for the trade. The essence of the indicator is to create a band within which price action will move. Since this trade is setup on a short term chart, it is a profitable strategy which gives a rate of success that approaches 70%.
However, traders should practice this strategy on a demo platform specifically to determine how long their expiry times should be.