Channel Ma Breakout Reversal
Trading System for Forex and Binary Options is a trend reversal strategy.
Based
on the following indicators:
Indicators:
1.
Bollinger Bands (BB) with a deviation of 2 and a period of 21.
2.
Relative Strength Index (RSI) with a period of 14 and a 14-period
Simple Moving Average (SMA) smoothed.
3.
3-period Simple Moving Average (SMA) low.
4.
3-period Simple Moving Average (SMA) high.
5.
Moving Average Convergence Divergence (MACD) with parameters 5, 15,
and 5.
Strategy:
1.
Bollinger Bands Confirmation:
–
Buy Signal: When the price touches or goes below the lower Bollinger
Band and then moves back above it.
–
Sell Signal: When the price touches or goes above the upper Bollinger
Band and then moves back below it.
2.
RSI Confirmation:
–
Buy Signal: RSI crosses above its 14-period SMA from below.
–
Sell Signal: RSI crosses below its 14-period SMA from above.
3.
Moving Average Confirmation:
–
Buy Signal: When the price crosses above the 3-period SMA high.
–
Sell Signal: When the price crosses below the 3-period SMA low.
4.
MACD Confirmation: optional
–
Buy Signal: When the MACD line crosses above the Signal line.
–
Sell Signal: When the MACD line crosses below the Signal line
Entry Rules:
–
Open a long position when all four indicators give a buy signal
simultaneously.
–
Open a short position when all four indicators give a sell
signal simultaneously.
Exit
Rules:
–
Close the long position when any of the indicators give a sell
signal.
–
Close the short position when any of the indicators give a buy
signal.
Risk
Management:
–
Set a stop-loss order to limit losses if the trade goes against you.
–
Take profit or partial profit when the trade moves in your favor,
based on your risk-reward ratio.
This
strategy combines multiple indicators to confirm reversal signals,
increasing the probability of successful trades. However, always
remember to backtest any trading strategy thoroughly and consider the
overall market conditions before executing trades.
Entry
Rules for Binary Options:
Call
Option (Up):
Open
a Call option (betting on price going up) when all four indicators
give a buy signal simultaneously.
Put
Option (Down):
Open
a Put option (betting on price going down) when all four indicators
give a sell signal simultaneously.
Expiry
time max 5 candles.
Risk
Management for Binary Options:
Set
a predetermined expiration time for the option, aligning with your
analysis of the market movement.
Use
appropriate position sizing to manage risk, ensuring each trade
represents a small percentage of your total trading capital.
Consider
using a binary options broker that offers early closure options,
allowing you to exit trades before expiration to manage losses or
lock in profits.
Binary
options trading relies heavily on precise timing and direction of
price movement within a specified time frame. Therefore, it’s crucial
to monitor the indicators closely and execute trades promptly
according to the signals generated.
