MT4 Pivot indicator
The Pivot strategy is another profitable binary option strategy. Trading is a bit more complicated in such strategy as it use MT4 Pivot indicator.
Using the Pivot strategy could be a smart way of making profit but only if you trade at a regulated broker.
It is a complex strategy which use hammer pattern, shooting star pattern and MT4 Pivot indicator. Traders will need some time of learning before start using it in real trading.
Hammer and shooting star patterns
Hammer is candlestick pattern that is used by us to trade binary options in accordance with this strategy. Classical hammer pattern consists of a small body and pin in one of the long sides. If a shadow or a spike looks down, it is a classic hammer.
If the shadow is looking up and the body – down, we have inverted hammer or a shooting star. It is important to emphasize that the ideal figure for hammer or shooting star would have the shadow on one side only. Closure of the candles should occur at the extremes. Under such conditions, the figure has the greatest chance of his detention.
Another important condition for a trend reversal after formation of hammer or shooting star patterns is finding a market price at their highs or lows. Only in this case, a hammer or a shooting star really can mean market reversal. As noted above, it is possible to build support and resistance levels independently.
Using MT4 Pivot indicator
Those who have not yet succeeded in this simple process, it is recommended to use the MT4 Pivot indicator. This indicator alone will build several levels of support and resistance and will do it for all time scales so that the trader can plan his work not only for the next few minutes, but an hour or more ahead.
Traders can use Pivot binary options strategy with different time frames. However, it is best to choose either fifteen minutes or four hours. Thus, on the fifteen minute chart daily pivot points will be used, and on the four hour chart – weekly.
How to trade Pivot binary options strategy?
So in order to trade Pivot binary options strategy, we need to find hammer of shooting star figure on the chart. This figure should be located either at the level of support (hammer) or near the line of resistance (shooting star).
Once a pattern that corresponds to all the rules is found, it is recommended to prepare for buying a binary option. Hammer pattern formed on the bottom of the market. A downward movement usually occurs before it.
Consequently, after the formation of this pattern a Call option should be bought.
However, it is recommended to wait and see if the next candle will go beyond the body of the hammer. Only then you can confidently enter the market.
The same applies to shooting star body forming. It is usually formed at the peak of the market. Before it an upward movement occurs.
Once a shooting star model finished the formation, it is recommended to prepare for Put binary option buying.
As for the deal, it is desirable to open only when the candle following the shooting star goes beyond its body.
In order to make this strategy more profitable, you can use moving averages. They can be installed on the chart in order to receive information for the current trend, and its changes. Thus, the reversal signal will be stronger.