MACD, RSI and MA
The Three indicators binary options strategy requires technical knowledge to practice it successfully. It is based on three indicators and two time periods, one of which gives a preliminary signal, and the second – directly buy binary option signals.
To make profits with the Three indicators strategy you need a broker with no entry delay so that you can control the strike price.
The essence of the method is to ensure that all three indicators show the same signal. For example, if the candle closes higher than the simple moving average, and Relative Strength Index and MACD turned up, you can buy Call options. Otherwise, if both indicators are pointing down, and the candle closes below the moving average, you can buy Put options.
How to use Three indicators strategy?
The Three indicator binary options strategy is basically an analysis of daily and four-hourly time frames. Trading is recommended only if following the main trend. You can also use this strategy on a one-hour time frame despite, it was designed specifically for a four-hour frames.
For this reason, it is recommended not to use it with lower time periods and remain within those scales that proved to be working under this method.
As a part of the Three indicators binary option strategy, you can use any trading tools that are offered by your binary option broker. The strategy is based not only on the above-mentioned periods, but on the simple moving average also.
Using this curve, the trader can determine the direction of market movement. Also, this strategy uses MACD and RSI binary option indicators.
How to trade Call and Put signals?
In order to get a trading signal it is necessary to determine what was the closing price of the last day candle related to a simple moving average.
It is important to remember that if the candle closes above the moving average on the four-hour time frame, it is necessary to consider only Call binary option signals.
In cases where the daily candle closes lower than the simple moving average on the four-hour time frame trader should seek out the opportunities to purchase only Put binary options.
Often it is quite difficult to determine whether the daily candle closes above or below a simple moving average. In this case, it is desirable to skip this trading day.
Using MACD, RSI and MA on a 4-hour time frame
Once the conditions for determination of the trend are fulfilled, it is necessary to switch to a four-hour time frame. It is also important to analyze not only the schedule, but also the indicators. On the four-hour time frame, it is necessary to determine the candle that would close above or below a simple moving average.
Considering Relative Strength Index indicator, you need to determine the direction of its curve (up or down). Regarding MACD indicator, you must trace the moment when the curve crosses the zero level top-down or bottom-up.
A signal for buying Put option will be the closing of the previous daily candle below a simple moving average.
At the four-hour time frame the candle must also close below the curve. In this case, Relative Strength Index indicator should follow the price direction that is to be turned down. Regarding MACD indicator, its curve must cross zero level from top to bottom.
Call options buying is possible under the following conditions. On the daily time frame the previous daily candle must close above the moving average.
On four-hour time frame trader also need to find the candle that would close above the simple moving average. Thus, RSI indicator should be deployed upwards and MACD should cross the zero line upwards.
Traders would need a lot of practice to become pros on this strategy as it is not an easy one but you can cash in. You need to know how to use properly indicators such as MACD, RSI and MA on the forex and stock charts.