Trend trading is rightfully considered one of the best methods of making a profit in the financial markets. The Phantom Follow binary options strategy is also based on this approach and generates signals to open positions exclusively in the direction of the dominant trend. There are many such systems. However, only in Phantom Follow can you easily distinguish a bull market flat from a bear market . How? Find out from our review. Those who read to the end will not only master the secret tricks: how to use this strategy as effectively as possible and significantly improve their trading results, but will also get a way to receive convenient arrow signals specifically for binary options trading.
Content:
- Characteristics
- Installation
- Overview and settings
- Phantom Follow Trading Rules
- Specifics of application
- Conclusion
Characteristics of the Phantom Follow binary options strategy
- Terminal: TradingView
- Timeframe: M15
- Expiration: 3 candles
- Option Types: Call/Put
- Built-in indicators: Follow Line Indicator (Dreadblitz), PhantomFlow TrendDetector (PhantomFlow)
- Trading instruments: currency pairs , commodities, cryptocurrencies , stocks
- Trading hours: 8:00 - 21:00 Moscow time
- Recommended brokers: Quotex , Pocket Option , Deriv , Binarium
Installing Phantom Follow Binary Options Strategy Indicators
Phantom Follow strategy indicators are installed in the TradingView platform via the menu of the same name at the top of the terminal. Click on the “Indicators” button, the “Indicators, metrics and strategies” panel will open. In its search bar, enter the name – Follow Line Indicator. Then find it in the list and click on it, having previously checked the name of the developer – Dreadblitz.
Then install the second indicator in the same way – PhantomFlow TrendDetector from the developer PhantomFlow. Leave all indicator parameters by default.
After installing these two technical analysis tools, only one of them will appear on the chart. To see the second one, you should hide the original candlestick chart by clicking on the “ellipsis” icon next to the name of the trading symbol and select “Hide” from the drop-down menu, as shown in the screenshot below.
After that the graph will look like this.
Phantom Follow Binary Options Strategy Review and Settings
The built-in TrendDetector indicator of the TradingView platform is absolutely free, but works no worse than expensive commercial products. It is designed to identify a trend by highlighting areas of trend changes in green and red. Green candles indicate a bullish trend, and red ones indicate a bearish trend. At the same time, areas of the chart without a specific trend are highlighted in purple and yellow. Purple candles indicate a flat (sideways movement) in a downward trend or a correction in an upward trend, and yellow ones indicate a flat in an upward trend or a correction in a downward trend. The color here is gradient, and the strength of the trend affects the brightness of the candles.
The Phantom Follow binary options strategy is quite versatile and can be used on different timeframes and assets. In our examples, we will use the EUR/USD currency pair . However, this system has also proven itself on other instruments: gold, cryptocurrencies, and stocks. Therefore, you should not limit yourself exclusively to currencies. Try, experiment, and share your results in the comments.
As you know, to be successful in trading, you should adhere to three basic principles: be able to identify a trend, follow it and take into account the momentum . The Phantom Follow strategy uses indicators that take into account all these principles when generating trading signals.
The PhantomFlow TrendDetector indicator has few settings: the user can customize the color scheme of the bars that determine the state of the market, and activate alerts.
The situation is similar with the Follow Line Indicator settings, which consist of the Bollinger Bands and ATR filter parameters.
Phantom Follow Trading Rules
In the Phantom Follow binary options strategy, the Follow Line indicator simultaneously performs two functions: it serves as a dynamic support and resistance level , as well as a trend identifier. If everything is obvious with support and resistance - the indicator values change stepwise, displaying the levels from which the price bounces, then with the definition of the trend, everything is not so clear.
Usually in such tools the price position above the indicator line indicates the prevailing bullish sentiment in the market, while the price below the line is a sign of the development of a bearish trend. But the developers of the Phantom Follow strategy went even further, adding two additional market conditions to the TrendDetector indicator: bullish and bearish trend flat. Now, in addition to the green and red candles signaling an upward and downward trend, yellow and purple ones have been added, displaying the bullish and bearish market flat, respectively.
To better understand how to trade within price trends, we recommend studying trend indicators, which you can learn about from a special selection of articles:
- Best Trend Indicators
- PZ Trend Trading indicator
- Trend Lines Indicator for MT4
- TJ10X Forex Indicator
- Fxaccurate Larna MT4 indicator
So, as was said above, for successful trading we should first learn to determine the trend. In the Phantom Follow binary options strategy, the beginning of a bullish trend movement is considered to be the appearance of the first green candle above the Follow Line indicator, and the beginning of a bearish trend is the appearance of the first red candle below it.
To follow the trend, we will open Call options when the green candles are above the step indicator, and Put options when the red candles are below it. Now we just need to decide on the momentum. We will bet on the rise only after the green candle closes above the previous maximum, and on the fall - after the red candle closes below the previous minimum. This additional condition will become a secret trick for detecting market sentiment - the mood of traders at a certain point in time.
Opening a Call Option
- We are convinced of the presence of an upward trend: the candles are above the blue Follow Line.
- We check for momentum: the green candle closed above the high of the previous candle.
- At the opening of the next candle we buy Call.
Opening a Put Option
- We are convinced of the presence of a downward trend: the candles are below the red Follow Line.
- We check for momentum: the red candle closed below the minimum of the previous candle.
- At the opening of the next candle we buy Put.
It is recommended to select the expiration time of 3 candles. Select the holding period of positions depending on the selected asset and the results of testing on historical data .
Specifics of using the Phantom Follow binary options strategy
In addition to the Follow Line, which is part of the Phantom Follow binary options strategy indicators, you can use trend lines , channels and other graphical analysis tools to determine the direction of the main trend. Do not open trades against the trend and do not trade during inactive market hours. As a rule, this leads to significant losses. Also, try to keep your emotions under control, open trades based on technical analysis and logic, and not based on your own feelings.
We often hear from traders that they have problems with adding more than two indicators to the chart of the TradingView analytical platform. To make trading with the Phantom Follow system easier for beginners, we have combined both indicators of this strategy into one and equipped it with arrows, making it much easier to follow its signals. We hope that this innovation will not only help you navigate the signals of this strategy more easily, but will also increase the efficiency of your trading. We talked about how to add custom indicators to the chart in the article “ How to add an indicator in Tradingview ”.
Pros of the Phantom Follow Strategy
The main advantage of this trading system is the ability of its indicators to distinguish and classify market areas. In addition to determining the bullish and bearish trends, the Phantom Follow strategy determines flat zones, conveniently highlighting them on the chart. An additional plus is the simplicity of the system, which even a beginner can master, and its versatility, thanks to which it can be used in different markets: from currency pairs and cryptocurrencies to indices, stocks and metals.
Cons of the Phantom Follow Strategy
The disadvantages of this trading system include some delay in determining trend areas. In addition, sometimes candlestick bars change their color scheme somewhat late, which leads to missing part of the unidirectional price movement. From our point of view, this is a reasonable price for reliable signals of this system. Any filter is not ideal. And determining a flat in this system is also no exception.
Conclusion
The Phantom Follow binary options strategy consists of free built-in indicators of the TradingView trading and analytical platform. Each of them has a special role in determining not only the current trend, but also the phase in which the market is currently located.
In order to increase the percentage of profitable transactions, the system provides rules for opening positions taking into account not only the trend, but also the momentum - the rate of change in the asset price over a certain period of time, which allows the binary options trader to count on continued movement by inertia in the direction of the trend. Before starting trading using this free strategy, we recommend practicing on a demo account with a broker with a minimum deposit , applying the rules of risk and capital management . We wish everyone successful trading!
Download Phantom Follow Signal Indicator
See also:
How to make money on binary options
Pros and Cons of Binary Options Trading
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