The Trend Meter binary options strategy is developed for the popular TradingView platform. It consists of two indicators: EMA Trend Meter and Stochastic Momentum Index. The first is designed to visualize the trend using colored elements, and the second is to determine the right moment to open a deal.
In this review, we will take a detailed look at how both of these indicators work together, what signals they generate, and how to use them to make a profit. You will learn the rules of trading using the Trend Meter strategy, its main advantages and disadvantages, and also get practical recommendations for setting up the indicators. If you want to improve the efficiency of your binary options trading, we recommend reading to the end.
Content:
- Characteristics
- Installation
- Overview and Settings
- Trading Rules by Trend Meter
- Specifics of Аpplication
- Conclusion
Characteristics of the Binary Options Strategy Trend Meter
- Terminal: TradingView
- Timeframe: M1
- Expiration: 3 candles
- Option Types: Call/Put
- Built-in indicators: EMA Trend Meter [colinmck], Stochastic Momentum Index [surjithctly]
- Trading instruments: currency pairs , commodities, cryptocurrencies , stocks
- Trading hours: 8:00 - 21:00 Moscow time
- Recommended brokers: Quotex , Pocket Option , Deriv , Binarium
Installing Binary Options Strategy Indicators Trend Meter
The Trend Meter 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 – EMA Trend Meter. Then find it in the list and click on it, having previously checked the name of the developer – colinmck.
After that, install the second indicator in the same way – Stochastic Momentum Index from the developer surjithctly.
For the Trend Meter indicator, set the parameters as shown in the screenshot.
We will also replace the parameters for the Stochastic Momentum Index oscillator.
Trend Meter Binary Options Strategy Review and Settings
Both indicators, EMA Trend Meter and Stochastic Momentum Index, are free and built into the TradingView analytical platform. The first of them, Trend Meter, is designed for trend analysis and is located at the bottom of the chart, where we are used to seeing oscillators.
This indicator consists of three EMAs weighted against one basic moving average . The colored squares represent the position of each EMA: green means the EMA is pointing up, red means it is pointing down. Note that three objects of the same color, aligned vertically, indicate that the price is likely to move in that direction.
The second indicator, Stochastic Momentum Index, is designed to determine the moment of opening a deal in the direction indicated by the Trend Meter indicator. In addition, it demonstrates local oversold and overbought, which also helps traders assess the prospects for concluding deals from current price levels.
Trades in the direction of the trend should be opened after the fast line of the oscillator crosses its slow line. Read more about the rules of trading according to the binary options strategy Trend Meter further in this review. Here we will only note - we recommend selecting the parameters of the indicators for your asset and timeframe .
Trading Rules by Trend Meter
In the binary options strategy Trend Meter, the trend direction is determined by the synchronous arrangement of color elements: three green squares indicate a bullish trend , three red squares indicate a bearish trend. Other combinations indicate the emergence of a flat on the market. At the same time, the intersection of the Stochastic Momentum Index oscillator lines from bottom to top is a signal to buy a Call option, and from top to bottom - to buy a Put option.
To increase the percentage of profitable trades, you can use candlestick patterns and Price Action formations. You can learn more about patterns that can improve binary options trading from this selection of articles on our website:
- Price Action Binary Options
- Pattern indicators for MetaTrader 4
- TOP 7 Regularities in Binary Options
Opening a Call Option
- All three Trend Meter elements are green.
- The fast line of the Stochastic Momentum Index crosses the slow line from below upwards
- At the opening of the next candle we buy Call
Opening a Put Option
- All three elements of the Trend Meter are red.
- The fast line of the Stochastic Momentum Index crosses the slow line from top to bottom
- 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 Trend Meter Binary Options Strategy
This is a classic binary options trading system based on finding a trend and opening trades in its direction. This strategy is characterized by high signal accuracy, and with correctly configured parameters of the EMA Trend Meter and Stochastic Momentum Index indicators, it allows you to make many profitable trades.
Like other stochastic oscillators, the Stochastic Momentum Index is sensitive to short-term market fluctuations. On the one hand, this helps to identify extreme price levels, on the other hand, during a flat, the indicator can generate false signals. Keep this in mind and avoid trading instruments with a weak trend.
Advantages of the Trend Meter Strategy
The main advantage of the strategy is trading on the main trend. Stochastic Momentum Index confirms EMA Trend Meter signals, which increases the reliability of trading. In addition, the parameters of periods and smoothing methods for both indicators are easy to change, which allows you to adapt their signals to different markets and timeframes.
Disadvantages of the Trend Meter Strategy
The disadvantages of this strategy include the fact that in conditions of high volatility and lateral movement, it can give false signals. In addition, there are no universal settings suitable for all assets. Each market requires an individual approach, so be sure to experiment with the indicator parameters to find the optimal values for your trading instrument.
Conclusion
The Trend Meter binary options strategy will help traders confidently determine the direction of trading. Its main purpose is to identify the current price trend. Built-in tools allow the system to generate many profitable transactions, especially in conditions of a strong trend.
By learning how to correctly interpret Trend Meter signals, you will simplify the process of binary options trading. However, despite all the advantages, the system also has disadvantages, which we have described in detail in this review. Before starting real trading, be sure to test the strategy on a demo account, choosing a reliable broker from our rating. We wish everyone successful trading!
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