Price EMA Binary Options Strategy

The price EMA binary options trading strategy is a trend strategy that utilizes the Price- EMA.ex4 indicator. The indicator is made up of exponential moving averages set to 50, 100 and 200 periods and a price filter.

Chart Setup

MetaTrader4 Indicators: Price-EMA.ex4 (default settings).

Preferred Time Frame(s):  1 minute, 5 minute, 15 minutes

Recommended Trading Sessions: Any time the signal appears on the charts.

Currency Pairs: Any. Other assets can also be traded.

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Trade Example For CALL Option (Click the image for full size)

price_emas__binary_strategy_call

STRATEGY

The principle of this strategy is to trade the moving average crosses. For this strategy, we will allow the moving averages move in tandem with each other close to the zero line, and then trade the direction they assume from the zero line.

When the three EMA lines are moving together (almost intertwined) on the zero line, price action is seen to be in consolidation; moving sideways in a tight range.

Once the moving averages start to move away from the zero line, price action is seen to break out in the direction assumed by the indicator lines. A trend line is drawn across the highs of price action (Call) or the lows of price action (Put). Once the EMAs move, price breaks above or below the trend line, providing a basis for Call or Put entries respectively.

Call Entry Rules:

A Call trade setup occurs when the following is seen on the chart:

  1. Price action in narrow consolidation, with a trend line being drawn across the highs.
  2. EMA lines in indicator window clustered around the zero level.
  3. Allow the EMA lines to start heading upwards, and see if price has broken above the trend line.
  4. Enter the Call option on pull back of the next candle which opens after the breakout candle has closed.

Expiry Time

The expiry for this trade is 2 candles, which is equivalent to 30 minutes on a 15-minute chart. Many platforms have expiry times of 30 minutes on their charts 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 setup occurs when the following setup is seen on the charts:

  1. Price action in narrow consolidation, with a trend line being drawn across the price lows.
  2. EMA lines in indicator window clustered around the zero level.
  3. Allow the EMA lines to start heading downwards, and see if price has broken below the trend line.
  4. Enter the PUT option on pull back of the next candle which opens after the breakout candle has closed.

price_emas_binary_strategy_put

Expiry Time

The trade should last only 2 candles, which is equivalent to 30 minutes. It is also possible to opt for the early closure when the trade is in profit. This however produces a lower payout.

Download

Download the Price EMA Binary Options Strategy

About The Trading Indicator

The Price-EMA.ex4 indicator for binary options uses three moving averages to provide the best possible confirmation for the price movements. The only drawback with this indicator is that the signals do not form very regularly. However, it is still a good strategy to use if the rules can be followed to the letter.

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