Trading binary options requires an increased sense of timing as many times the trading opportunity ends within a fixed time frame. So not only the trader has to exist correct on the direction but it has to be right on time too!

On the other side, the payout of binary options is relatively loftier because that with a small move in favor of the trader and within a short menses of fourth dimension the trader can be rewarded with upward to 100% render on investment. So with that being said, a binary options strategy has to be specific and should result in capturing the market when it'due south virtually likely to make the move in the preferred direction.

A strategy is like a cooking recipe. The improve the ingredients are, the better the results will be.

Binary Options Strategy Components

Ingredient №1: Kaufman Adaptive Moving Average (KAMA)

This moving average is 1 of the best as it uses specific calculations to adapt to market cost and gives less fake signals than the commonly used simple moving averages (SMAs) or exponential moving averages (EMAs).

Hither we are going to employ information technology with default setting as found on the IQ Option platform (run into the beneath image).

Binary Options Strategy - Trend & Trend Reversals

Ingredient №two: ATR Trailing Stops

When it comes to using the all-time of the all-time, ATR Trailing Stops never fails to impress. Information technology's probably the best indicator for trailing stop losses as the proper noun implies. Moreover, information technology is one of the best indicators to signal a change in trend timely.

In this strategy nosotros are utilizing the ATR Trailing Stops with its default settings, every bit shown in the screenshot below.

Binary Options Strategy - Trend & Trend Reversals

Ingredient №iii: QStick

We are using QStick only on the trend reversal part of the strategy. The reason is that trading a counter trend reversal is inherently more risky and requires better timing of entry than just trading an established trend.

Although information technology resembles an oscillator, QStick tin can be used as a trend indicator. By adding information technology to our mix, we can increase the probabilities that a countertrend indicate is valid.  The settings used with QStick are the default ones and shown in the epitome below.

Binary Options Strategy - Trend & Trend Reversals

Duration & Candlestick Timeframe

This binary options strategy works on any time frame. In this example, we are going to show the setting for the turbo options which is the fastest category of binary options. We are focusing on 60s or 1 infinitesimal turbo options.

The candlestick timeframes are approximately ¼ of the selection expiration time which gives u.s. the 15 seconds candlestick duration.

We are going to be using the KAMA and ATR Trailing Stops indicators simply for buying and selling with the tendency. On the trend reversals nosotros are going to be calculation the QStick to the strategy as well.

Binary Options Strategy - Trend & Trend Reversals
The strategy settings

The Trend Strategy

Buying ("Higher")

  1. Buying at the start of the new bullish trend is allowed only if both cost and the ATR Trailing Stops indicator are above the KAMA moving average.
  2. So we must look for the first bullish candlestick to close above the ATR Abaft Stops indicator.
  3. Nosotros tin buy or enter a long trade immediately on the side by side candlestick open.
Binary Options Strategy - Trend & Trend Reversals

Selling ("Lower")

  1. Selling at the start of the new surly trend is allowed merely if both toll and the ATR Trailing Stops indicator are beneath the KAMA moving boilerplate.
  2. Then we must wait for the first bearish candlestick to close below the ATR Abaft Stops indicator.
  3. Nosotros tin can sell or enter a short merchandise immediately on the side by side candlestick open up.
Binary Options Strategy - Trend & Trend Reversals

Trading Tendency Reversals

In order to trade trend reversals, we demand to use another indicator, the QStick. QStick filters out bad signals and improves indicate consistency and success.

Ownership ("Higher")

Buying a bullish correction/reversal on a bearish trend required three steps:

  1. Get-go the bearish trend must exist clearly visible with the price going far below the KAMA moving average.
  2. Then we need to meet a correction and the price endmost above the ATR Abaft Stops.
  3. The last thing we demand to check is the QStick. If it turns green, we tin open a long trade or purchase the asset on the side by side candlestick open.
Binary Options Strategy - Trend & Trend Reversals

Selling ("Lower")

Similarly, selling a bearish correction/reversal on a bullish trend required three steps.

  1. Starting time the bullish trend must exist clearly visible with the toll going far above the KAMA moving boilerplate.
  2. Then we demand to run across a correction and the price closing below the ATR Trailing Stops.
  3. The terminal thing we need to check is the QStick. If it turns red, then nosotros can open a short trade or sell the asset on the next candlestick open up.
Binary Options Strategy - Trend & Trend Reversals

Nautical chart Setup — Tips for Strategy Improvement

It's always disquisitional that the trader sets upward his or her charts in a way that can enable them to discover every bit many markets every bit possible at the same fourth dimension. This is important every bit to non miss an opportunity.

Starting with iv charts is ideal for beginners, while gradually the trader tin employ up to ix charts on a three by 3 fix. In improver, saving the trading indicators as a template is critical, so the strategy tin can be loaded fast in every bit many charts equally necessary.

Binary Options Strategy - Trend & Trend Reversals

Moreover, information technology's important to always filter pick payouts from highest to lowest, so the trader can quickly focus on the best deals. The higher the reward, the higher the profit. Sometimes the payout tin can accomplish 99% or fifty-fifty 100% which makes risk advantage more than favorable for the trader.

Conclusion

So at that place yous have information technology, a binary options strategy for picking trends at the outset and reversals at the terminate of the tendency. Timing, discipline and right execution are critical for the success of this strategy.

While there is no 100% strategy, bending the odds more in the favor of the trader is the case of this strategy. Meanwhile, the markets do non always offer adept opportunities, so it's critical that the trader does not focus just on 1 market and besides avoids trading in hours where the trading volume is very low and the markets become choppy or merchandise sideways.