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Long moving average - simple binary strategy

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Assets: All the assets, GOLD is the best.

Trade Idea: The strategy is quite simple. The basic idea is as follows: Long moving averages form dynamic support and resistance levels for the asset. When the price touches them, it turns.

Indicators: Moving average indicators with the following periods: 365 EMA, 150 EMA and 200 SMA. All apply to Close.

When to use:The frequency of the usage depends on the timeframe you use. However, it is important to choose the platform MetaTrader 4.

Trading Method

The method is very simple.You need to wait until the price will touch one of the moving averages, which is a signal to buy an option. It is important to buy options when the price is equal to the moving average. If the broker does not allow a buy option at this time, it is better to miss it and wait for another.

How does it work?

There are two options:
• The price approaches the upper Moving Average. In this case, you should be ready to acquire the option Call.
• The price approaches the lower Moving Average. Therefore, it is necessary to acquire a Put option.

You should pay attention to several aspects:

It is important to choose the correct expiry time. You should mainly rely on the preliminary analysis of the price behavior in the previous period.
If the option is OTM (i.e., the price crossed the moving average), it is better to refrain from trading for a while until the price stabilizes.


Choose expiry times based on the next candle. For example, whenusing a 5M chart, if the price touches the MA at 15:14, the expiry time of the options should be at 15:20 (current candle ends at 15:15).

Buy options only when the price is equal to the MA. If you do not have time to buy an option at this time, just miss it. Long moving averages act as support and resistance levels. Using this indicator, we expect that the price will change direction when it will touch the resistance or support level.


baller's picture

since you didn't explain why you suggest MT4, I tried this using

Using /GC, a 1 day candle/bar period, the 150ema reliably acted as resistance level since May 25, 2015

The other ema and sma came no where close to price.

But the 150ema is a neat trick. Thanks.

@FreemanZ's picture

I use MT platform because it's the most popular among the traders. It also allows use the same indicator with the different periods. Of course you can use this strategy with any paltform which allows use these indicators.

vinayak1000's picture

Hi FreemanZ,

This is a great post on a nice binary options trading strategy. I will definitely follow this and look to execute some trades with gold keeping this in mind.

Thanks a lot for sharing this here. I hope to connect with you on this forum.