Binary options trading attracts many people, and this is not surprising, because with the help of this financial instrument you can quickly earn money by predicting the movement of the asset price. Unlike traditional technical analysis , based on many indicators , non-indicator strategies offer a different approach to trading. This method involves analyzing the market using fundamental factors and graphic patterns .
In this review, we will take a detailed look at what indicator-free strategies are, what advantages they give to traders, and also analyze several popular methods. Find out how to simplify the process of making trading decisions and increase your efficiency in the binary options market without using complex technical indicators and systems.
Content:
Basic principles of indicator-free strategies for binary options
The best non-indicator strategies for binary options
- Trading Strategy “Candle Direction”
- Indicator-free strategy based on Price Action
- Trading Strategy “Binary Triumph”
Basic principles of indicator-free strategies for binary options
Indicator-free strategies for binary options assume that the trader makes a decision to open a deal not based on signals from technical indicators, but on a graphical analysis of the asset's prices, its key support and resistance levels , as well as fundamental factors.
Therefore, in order to successfully apply this approach, a trader should study the basics of technical analysis, the rules for reading candlestick combinations and graphic figures with a high probability of price movement in a certain direction after their occurrence.
If you want to better understand the basics of non-indicator trading, we recommend that you read a selection of articles on this topic:
- Graphical analysis of binary options
- How to Trade Chart Analysis Figures
- Japanese candlesticks - graphical analysis of charts online
- Live cryptocurrency chart online
- Live chart for binary options free online
Why trading without indicators can be effective?
Many experienced traders prefer not to use technical indicators in binary options trading, and here's why. The fact is that graphical analysis itself is a powerful tool that allows not only to visually analyze historical prices and volumes of a financial instrument, but also to generate trading signals .
What is the reason for such effectiveness of the analysis of the “naked” chart? Let’s figure it out.
First of all, we note the simplicity and clarity of trading approaches used by traders who adhere to trading on “clean” charts. The absence of many lines and numbers allows you to focus on key price levels, trends and patterns.
As is known, humans perceive and process visual information well. Therefore, charts that are not overloaded with complex indicators make it possible to quickly assess the general price trend and identify potential transactions.
Thus, binary options traders focus on the fundamental principles of trading: the struggle between supply and demand. A simple chart reflects the collective behavior of traders, and various concepts of technical analysis - from Charles Dow's theory to Ralph Elliott's waves - help not only to find repeating patterns and predict future price movements, but also to study the psychology of the crowd .
In addition, “naked” charts are free of the shortcomings inherent in many indicators: they do not repaint as new exchange data arrives and do not mislead the trader. In addition, the use of a large number of indicators often leads to contradictory signals , which can completely confuse a novice speculator.
Why choose indicator-free strategies?
Binary options trading without indicators attracts many with its simplicity and accessibility, even for beginners. Such strategies are easy to remember, their signals do not lag behind the market, as sometimes happens with indicator approaches, and allow you to focus on key levels and price reversal points.
Advanced traders can open trades based on the economic calendar and take into account the market's reaction to important news releases in advance.
The best non-indicator strategies for binary options
Now let's move on to practice and consider several simple strategies for binary options. Before using them in real trading, we strongly recommend testing them on a demo account .
Trading Strategy “Candle Direction”
The principle of this trading strategy is based on the assumption that any trend cannot last forever, and in any price movement there is always at least one candle of the opposite color.
A deal to buy a Call option should be opened after four consecutive downward candles appear, and a deal to buy a Put option should be opened after four consecutive upward candles appear. Such deals can be made on charts of any time frame , but beginners are recommended to work with periods not lower than an hourly one.
Also keep in mind that the number of consecutive candles of the same color required to open a trade is not a strictly fixed rule. This indicator depends on the specific asset and its tendency to trend movements. For one currency pair, three consecutive candles may be enough, while for another, five or six will be the optimal choice.
Therefore, we recommend selecting this parameter individually, taking into account the features of the timeframe and the financial instrument being traded.
As you may have guessed, this trading strategy uses the Martingale principle : after each loss, the bet in the next transaction is doubled. To correctly apply this approach, we recommend using the Martingale calculator , available on our website.
Trading signals for buying Call and Put:
Call purchase rules | Put purchase rules |
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Expiration time – 1 candle.
Indicator-free strategy based on Price Action
Price Action trading is an approach to trading that is based on the analysis of price movements without the use of any indicators. The essence of this approach is that all the information a trader needs to decide whether to open a trade is contained in prices.
According to this system, we need to find a candle with a very short body on the asset chart, where the opening price differs slightly from the closing price. The length of the shadows of such a candle does not matter. On the one hand, it can be long, on the other - short or absent altogether. Those who professionally trade binary options call such a candle " Pin-bar ".
According to our observations, this system has proven itself best on timeframes from M15 and higher. We recommend choosing the expiration period of 1-3 candles depending on the traded instrument and the results of testing on historical data. Please note that if the “pin bar” appears in a price channel with clear boundaries, you should not take it into account and open trades based on it.
To open a position, it is important that the body of the "pin bar" is within the range of the previous candle. This rule helps to filter out false signals and increases the percentage of profitable trades.
Trading signals for buying Call and Put:
Call purchase rules | Put purchase rules |
|---|---|
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Recommended expiration time is from 1 to 3 candles.
Trading Strategy “Binary Triumph”
The Binary Triumph indicator-free strategy for binary options is based on the Price Action pattern – “Tweezers”. According to our observations, this system is highly accurate. A clean chart and trend lines can provide you with many successful trades on binary options.
Let's see how it works.
Signals for the Binary Triumph strategy on a five-minute chart appear after the following candlestick combination is formed:
- A “Tweezers” pattern appears on the chart – a candle with opening and closing prices that are almost equal to each other, and a long shadow that significantly exceeds the body of the candle.
- The next candle forms an engulfing pattern – its body completely covers the body of the previous candle.
Once we have found such a candlestick formation on the chart, we need to apply a method called the "Countdown Candlestick". This method will allow us to get the most accurate signal to enter the market.
How to build a "Countdown Candlestick"?
- From the “Tweezers” candle, draw a horizontal line, as shown in the picture above.
- We draw a line 8 candles ahead, but this can be problematic when working in MT4 , so it is better to use charts on TradingView or MetaTrader 5.
- We connect this line with the maximum/minimum of the candle before which the reversal occurred, but not more than 14 candles ago.
Trading signals for buying Call and Put:
Call purchase rules | Put purchase rules |
|---|---|
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The recommended expiration time is from 4 to 6 candles.
Conclusion
All the described strategies have proven themselves to be excellent when trading binary options on different timeframes. However, we recommend that you first test them on a demo account. We also remind you that for stable operation, in addition to the strategies, you will need a proven binary options broker that withdraws earned profits without delays. We recommend choosing one of the reliable brokers in our rating .
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