>The proposed indicator for binary options has a non-standard approach to determining the trend. Also, the use of PZ Trend Trading is associated with such a positive aspect as the absence of redrawing. With its help , signals are generated for binary options , making it possible to divide the movement of a market asset into phases. As a result, the following can be achieved:
- the direction of the trend is determined;
- a rollback is recorded, which means a price correction;
- there is a change in trend direction.
Features of using the indicator
The use of PZ Trend Trading relates to the following points:
- Trading platform – MetaTrader 4 .
- Currency pairs – everything, excluding cross pairs.
- Trading time – no restrictions (24 hours).
- The type of indicator used is composite, which provides a combination of a trend and an oscillator.
- Suitable brokers are Alpari , Binary.com , Quotex , PocketOption , Binarium .
Condensed indicator analysis
The use of this tool results in the following indicators:
- trend direction;
- changes associated with correction;
- restoration of trend direction;
- the onset of a reversal when the trend reverses its direction.
Trend phases are easily determined due to the available markings based on numbers, colors and graphic design of lines:
- one – blue indicates an upward trend, and red indicates a downward trend;
- two – the price is in the correction stage;
- three - coloring in gray signals a rise or fall, which corresponds to how the previous unit was colored;
- lines with breaks or dotted lines – price channels;
- continuous lines are the boundaries of resistance and support.
The indicator under consideration for binary options is not easy to use. At the same time, the developers recommend adhering to the following tips:
- the timeframe requires the right selection, you should not go below H1;
- it is necessary to apply other filters, which mean oscillators , take into account support and resistance levels , and take into account graphic figures .
The creators of the indicator provide positive statistics on the use of their instrument. Profitable trades are up to 85%. This is due to the formation of a small number of false signals during a trend on daily candles. Another positive point is the recognition of corrections, which creates conditions for making money when moving against the trend.
How the PZ Trend Trading indicator works when trading binary options
It is based on searching for a so-called trend within a trend in accordance with the established settings and a given number of candles for analysis. The movement is divided into parts, the definition of which occurs at the moment the candle closes within a specific timeframe. Recognition of a correction is made taking into account the history factor: previous bars are analyzed. Further movement of the trend is the formation of a new local minimum after the correction candle, which occurs within the trend and outside its limits.
The separation of a trend and a rollback (correction) leads to the possibility of refusing to enter into trades when a “one” appears, which is important for new players. Here, signals confirming the correction are taken into account, as well as those indicating the continuation of the trend. When choosing appropriate tactics for trading, tests are used, which leads to high performance due to the peculiarities of the indicator. The signals it generates are free from redrawing.
If you look at the figure below, you can see the following picture in the corresponding section of history:
- correction signal 2 in relation to the downward trend did not become a development of the previous movement 3;
- there was a reversal of the mentioned signal at point 1, which is indicated in blue, followed by an almost immediate change in the trend towards the fall - 1 (red).
In this case, a kind of saw appears as a classic phenomenon in conditions of market volatility, which correlates with a large number of false signals. Such instability is a suitable field for testing arrow indicators for binary options, characterized by a low number of negative trades in areas of such complexity.
The indicator settings provide the ability to control the display of issued signals and time window periods where trends are recorded in accordance with historical quotes.
Indicator + scanner for binary options
In the indicator archive at the end of the article, there is an application called PZ Trending Scanner. With its help, Forex assets are displayed in a separate window, which increases the speed of accessing them. Such tools are used to track strong trends in the current time period and make corrections on timeframes in accordance with the range M1–MN1.
This approach simplifies the trader’s work. It becomes possible to demonstrate other currency pairs within one chart. Pairs trading with binary options is also becoming available.
To this should be added the presence of a built-in table in the indicator, on the basis of which movement is monitored in timeframes of the M1–MN1 range. Along with the color coding, other trend symbols are present:
- weak – weak trend;
- strong – strong trend.
How to install the PZ Trending indicator
The indicator archive includes the MQL4 directory, which contains 2 directories: Indicators and Libraries. Install indicators in accordance with the proposed description. Please note that the files are copied to the designated folders in the MetaTrader4 terminal.
If permission to import DLLs is set in the terminal and the files are transferred correctly, the placed objects will appear in the “Custom Indicators” menu.
Instructions for installing indicators in MetaTrader 4:
Indicator settings for binary options PZ Trend Trading
To start using the indicator, you need to add it to a chart that displays the trend of a currency pair. After this, if desired, the settings can be changed, which is available in the corresponding window. Similar work is carried out only in the “Input Parameters” tab; we do not touch others. However, you can still change the visualization of the lines. The “Colors” section is intended for this, where the settings of these elements are specified, which also applies to the coloring of signals.
The settings are divided into 3 blocks:
- Indicator Settings – everything related to the direct operation of the indicator.
- Dashboard – color design of signals depending on specific instruments and timeframes.
- Alerts – notification.
Indicator Settings contains the following parameters:
- Indicator Period – size of the window where quotes are displayed. A suitable value is 200 candles. With a shorter period, it will be impossible to follow the trend, taking into account the identification of rollbacks and moments when growth or decline resumes.
The above figure shows a chart with a period of 200, and below - 10. In the latter case, signals 2 and 3 are not available, which also applies to channel lines, including resistance and support.
- Display trends smaller as bars – takes the value true or false. When choosing the first option, the colors of the candles are allowed, while the second option is prohibited.
This option is aimed at the possibility of using the indicator with other similar tools, which are based on the use of other ways to indicate the price range. Numbers and lines are subject to custom changes, and timeframe colors are set in the terminal settings.
- Display pullback (2) – blocking the display of correction signals 2 (false) or restoring them (true).
- Display Inside Bar Breakouts (3) – visualization of candles associated with the further development of trend 3, which requires setting the parameter true (allow) or false (deny).
- Display Corrections (dashes) – prohibit or allow the display of lines indicating support/resistance (true, false).
- History Bar to Evaluate – setting the number of candles within the selected timeframe used to analyze the current trend. This parameter should be set as high as possible, provided that this does not cause problems in the operation of the PC processor and the terminal itself. The maximum acceptable value is 10000, and the ideal value is 2000.
How to set up PZ Trending Scanner
“Custom indicators” is a section where you can set the placement of this application on any chart. As a result, it becomes possible to access the settings window. The required changes are made in the “Input Parameters” tab; in the rest, setting new values is not provided.
Setting up the scanner operation - managing variables in 4 blocks:
- Symbols and Timeframes – selection of a market asset in the form of a particular currency pair indicating the depth of trend scanning. In the latter case, we mean the range from 1 minute to a candle with a value of a month.
- Indicator Settings – determining the period, as well as excluding components of trend signals.
- Display Options – Set window sizes, including font selection.
- Alerts – notification.
Analysis of signals for binary options from the PZ Trend Trading indicator
If signal 1 is received, this indicates a trend reversal or the beginning of such an event. Characterized by the fact that quotes go beyond the boundaries of the channel. A trader can use pending trades provided by the broker Binary.com , in relation to the Buy, Sell and Stop lines or taking into account the moment when the candle closes. This is due to the following feature of the indicator: there is no redrawing of signals.
Signal 2 occurs on the candle that determines the end of the correction on the current timeframe. In 85% of cases of this type, signals additionally confirm the trend. You should enter a trade only at the moment the candle closes, and only in the direction of the trend in accordance with the color of the candle or the number 1 (call option - blue, put option - red).
As for signal 3, it is much less significant compared to those already considered. It demonstrates the development of a trend. The developers' advice here is as follows: additional purchase of a CALL or PUT option, subject to an open transaction in the same direction.
Support and resistance lines refer to levels that arise during a significant price reversal. Such moments are signals that we should expect the formation of a trend directed in the opposite direction.
Example of PZ Trending Scanner indicator signals
PZ Trending Scanner should not be perceived as a trading indicator. This is a tool that is a filter, the work of which is associated with identifying strong trends of the current moment in accordance with the settings set by the user.
A specific example is shown in the figure below, which displays several currency pairs:
- AUDUSD (hourly candles), GBPUSD (four-hour candles), NZDUSD (day session chart) – the trend is defined as downward (Breakout). According to the time stamp, this trend in the day session was recorded yesterday, and in relation to the hourly and four-hour candles, this happened recently.
- USDJPY – significant growth on H4 and MN.
- USDCHF – reversal towards growth on H4.
- EURUSD – adjustment on the hourly clock (trend is growing).
Using an indicator and scanner for binary options trading
The Elder's Three Screens strategy is ideal for successful binary options trading when the PZ Trending Scanner indicator and filter in question are used.
To execute a transaction based on a scanner signal, select the moment when two strong trends (Breakout) are formed on adjacent timeframes of the same asset. You can use the View button to open the chart.
In our case, the currency pair is USDCHF and the transaction will need to be opened to increase the price (call option). To determine the exact entry point, we resort to the “Three Elder Screens” strategy, applying the PZ Trend Trading indicator to charts with basic settings.
The Elder strategy used involves the definition of 3 time frames, distinguished by the presence of identically directed trends. A suitable entry point appears when a support line forms on the youngest candle. This choice is associated with frequent trend reversals after continuous support/resistance levels appear on the chart.
As we see in the Dashboard, there is a downward trend on M1, and an upward trend on M5 and M15.
The purchase of a call option occurs when the trend changes to M1
Conclusion
The indicator breaks the trend into phases. This is not only interesting, but also has undoubted benefits for trading. An additional tool that is a trend scanner is also productive. At the same time, PZ Trend Trading cannot be considered an independent, profitable trading strategy for binary options, but with proper use of money management you can get good profits.
Download the PZ Trend Trading indicator
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