USDEUR Binary Options Strategy

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Trading EUR/USD

Why Trade this System?
One of the main reasons we chose the EURUSD as the underlying asset of choice to trade this system is because it is the currency pair that is traded the most in the forex market. This ensures that as a binary options instrument, it is available for trading all day long and will have good liquidity, enabling you to get good pricing. You will not have to buy costly bets that will have a greater risk than reward.

If you are starting out in binary options trading, this is a great way to start your trading career. This system can be used to trade the Rise/Fall variety of binary options. If your broker does not offer this trade type, you can opt for the High/Low variety or the Touch/No Touch binary option.

Setting Up the System:

Most binary options brokers do not provide charts for use in trading analysis, so you have to get the charts yourself. Since the underlying instrument is a forex instrument, you can easily get a chart by downloading an MT4 platform from any of the popular forex brokers like forex.com.

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The strategy in question is to be implemented on a 30-minute chart, and the strategy will make use of the following indicators:

1) MACD (12, 26, 9): This is a momentum indicator that shows the strength of the signal.

2) Parabolic SAR (default settings of 0.02, 0.2): This is a trend signal.

Here are the trade rules for this strategy.

BULLISH SENTIMENT: In order for the EURUSD to go bullish, we wait for the Parabolic SAR indicator to indicate a buy signal, which occurs when the stars of the Parabolic SAR indicator appear below the price action on the chart. We also wait for the MACD lines to cross from negative to positive.

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BEARISH SENTIMENT: In order for the EURUSD to go bearish, we wait for the Parabolic SAR indicator to indicate a sell signal, which occurs when the stars of the Parabolic SAR indicator appear above the price action on the chart. We also wait for the MACD lines to cross from positive to negative.

Once you have got a confirmation of the signals, the next step is to choose the binary option trade of your choice. For this example, I will recommend choosing the Touch/No Touch option. This is easier to predict than a Rise/Fall or a range option, as all you need is a touch, (or no touch) to make money on this trade.

If you are bullish on the EURUSD, you can decide to purchase a Touch option contract, selecting a strike price to the upside. Make sure you identify the resistance points and keep your strike price below the resistance so you can be sure the price action will actually touch the price barrier you have set. You can then purchase a “No Touch” option contract, selecting a price barrier to the downside. In this instance, you can set your price barrier well below the nearest resistance so the price action has no chance whatsoever of touching your price barrier.

Repeat the same trade sequence in reverse fashion if your signal indicates a bearish outcome. Whichever trade you decide to take, you should at least have 4 different trade options to benefit from:

  • Touch – Price barrier between market price and nearest resistance.
  • No Touch – Price barrier below the nearest support.
  • Touch – Price barrier between market price and nearest support.
  • No Touch – Price barrier above nearest resistance.

EUR/USD Price Action Strategy for Binary Options

This EUR/USD price action strategy is suitable for traders who are more experienced. You would need to use resistance and support lines as well as time patterns to make a profit when trading EUR/USD. This is not a purely mechanical strategy and needs some know-how to be used effectively. There is one indicator only and you need to know how to use resistance and support lines, need to be able to understand candlesticks and recognise trends. This strategy is especially beneficial if you enjoy trading with short expiries of 10 to 20 minutes or so on USD and EUR.

How does this strategy work?

Using a Stochastic Oscillator, the clock and price action, this strategy helps predict when trend retracements might happen. Use the Stochastic on its standard settings of 5, 3, 3 and mark signal levels at 80 and 20 in order to confirm the signals that show on or near the specific lines.

Draw horizontal lines on the charts. These are the resistance and support lines, which are also called horizontal trend lines. Try working on higher frames of time such as 1 hour or 4 hour or even daily if possible as these prove more reliable. As an experienced trader you know you way around drawing these lines and knowing which ones are significant as well as why some are stronger and some weaker. The stronger resistance and support lines are usually those at the higher time-frame. Where price action is thickest and candle bounces, the lines are often stronger. If you work on two charts at the same time, one on H1 and one on M5 you can see when the price is moving towards one of the stronger resistance or support lines. Watch the Stochastic and the clock to get a signal when the price is trending and seems to be moving towards a major resistance or support line. The timing of the signals is the most important part of this specific strategy.

For example, if you look at the chart based on 15 minutes for EUR/USD and look at the cross-hair on MT4, then look at the half hours and full hours you can see that retracements occur around every half hour during a standard trading day. So you need to look for a possible retracement when the clock is about to hit the hour or half hour. This means you could possibly have trade entries 48 times in each day, but the price does not always follow the pattern. This is where the Oscillator comes in handy as it confirms the oversold and overbought levels and also highlights potential resistance and support and gives you the actual signal. The signals do not always follow the trend. Trading the retracement should happen when one of the resistance or support lines are reached and there is confirmation from the Oscillator. You can look at trading the retracement or work on the trend of the entries that occur once the retracement has taken place.

Pros and Cons of this Strategy

This strategy is not recommended for a beginner. You would need to know what you are doing when trading EUR/USD and know how to draw your trend lines on your charts as well as the resistance and support lines. There is a very short expiry and patterns are often neglected which could result in a bad trade. A good market entry and relevant expiry is crucial to have a profitable trade and time is only one of the factors.

OUR RESULTS

This strategy has been tested and has given a decent return after 6 months of trading (around 62% ITM in under 200 trades) which can be improved on even more. It doesn’t rely on indicators, trends and patterns are carefully considered when finding signals. This strategy has only been tested on EUR/USD but may work equally well on other forex pairs.

USD/EUR Binary Options Strategy

There are many binary options website out there that offers strategies for your trading needs. However, because of the number of websites that lure you to trusting them, it can be hard to decide which one you should trust. If you are trading USD and EUR currencies we have this great strategy than can help you be successful with your trading ordeals. USD and EUR are the most commonly traded pairs in the foreign exchange market. This is why there are some strategies that you have to rely upon. Trading both currencies is a smart move because these are very liquid and is less risky to sudden unstable movements. Another reason most traders chose both currencies is that it almost trades 2/7 and typically has good prices as compared to other currency pairs.

HOW DOES IT WORK?

The EUR/USD simple strategy for binary options was specially created for using low/high and touch or no touch kinds of binary options. It makes use of PSAR and MACD for signals. Novice traders can surely appreciate BO.net. Trades, as well as Analysis, depend on thirty minute charts. This means that is quite a short strategy. Its momentum indicator here is the MACD and the PSAR is for trend determination. PSAR and MACR are set to standards which are 9,12,26 for MACD and 0.20 and 0.02 for PSAR.

This strategy makes use of 2 signals specifically bearish and bullish signals. For bullish signals, you need to wait for PSAR to be below the price action and the MACD has to be bullish. This shows that the trend is bullish and that it has a bullish momentum. The opposite is correct for the bearish signal to transpire. PSAR begins above the price action and the MACD crosses over from a bullish signal to a bearish signal. To enter a trade, you need to have either signal. We suggest a touch or no touch for its trade when there is a strike in price that is below the resistance level for bulls or for bears – an above support. Because this is what resistance and support can offer a barrier towards trade. If this is the case then it is recommendable to take the no touch position.

WHY THE EUR/USD STRATEGY IS NOT SO GOOD?

This strategy may not be so good because it advices your to use the touch or no touch options which is a kind of trading that typically comes with great returns, but also comes with great risks. The fact that it only comes with one touch for pay out makes the required levels quite far from what you will most likely expect on asset movement. Moreover, if you choose the no touch due to support and resistance and some factors, then you are taking risks that the movement will just go as far as the line. It also sucks because longer term trends are not that important here.

WHY THE EUR/USD STRATEGY IS GOOD?

This strategy is quite good because you can use 2 approved indicators with good entry points. These indicators also suggest what kind of binary option you may trade. A likable and commonly used indicator here is the MACD making it a very useful tool. As mentioned before, it is considered as a momentum and confirming indicator. If you have less experience on PSAR, you will come to like it if you use this strategy. It can be used in binary through forex or futures trading and offer great signals. When you use this together with MACD, you can surely improve your binary options. The strategy comes with well defined signals lacks some extra support for long term trends. With this being said, every buy signal needs the two indicators for confirmation thus doing away fake signals.

FINALE

If you want to trade short term binary options, this can be a great strategy. But it can leave you with some stipulations. The thing that you can change would be the kind of option from the referred touch or no touch to a high or low style position.

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