The “Module” trading strategy is unique in its ability to attract advocates of forecasting price movements through the use of technical indicators. It can be applied to any currency pair, producing accurate trading signals, and aids traders, who already have experience in multi-indicator strategy.
How the system operates
The system’s developers based the algorithm on the three most popular technical analysis strategies for applying to binary options, the RSI and MACD oscillators and the Moving Average. As you can see, they are the most profitable technical indicators for binary options, which have the unique ability to forecast future market activity. The RSI is the best technical indicator to predict when the market will be extremely overbought or oversold, forecasting a price retracement. The new trend in market forecasting is to apply in combination the Moving Average, to follow the price trends, and the MACD oscillator, to discern price movements. Thus, generating a comprehensive trading signal, giving you the ability to enter the market at the optimal time.
In using the “Module” trading system it is possible to customize your indicator template in the quote window. If you trade on an advanced trading platform, with an in-built set of indicators and the ability to customize their parameters, then you won’t experience any issues. As a demonstration, we use the Binomo trading platform, because it has all the necessary functions integrated.
In order to set-up the TC “Module” template on the platform, you need to select a trending asset with moderate volatility, then input the indicators shown below with the values you are using:
- The Moving Average with a period of 35 minutes
- The MACD with the values 25/50/9
- The RSI with a period of 10 minutes and extreme values 70/30
You can change the time frame at your own discretion, in our example we use M1.
After setting up the customizations, you will have completed the full layout, on which you will get trading signals from your indicators. This should be similar to what you see on your screen layout:
How to place trades with indicator-based strategies for binary options
Viewing indicator signals on this platform isn’t difficult, however, take into account that technical indicators do not produce signals simultaneously. The RSI will be the first indication of an imminent market retracement, demonstrating that the market has reached its peak, therefore, forecasting a retracement. The next confirmation of the new trend will be seen in the MA, whose movement should break through the price, and the MACD, whose lines should turn around, intersecting in a new direction.
In order to formalize the trade ABOVE, a signal, which looks like this, will appear on the screen:
- the RSI retracement level of 30 and the forecast future upward movement
- the price breakdown of the MA is above
- the MACD movement intersection with an increasing slope:
In order to formalize the trade BELOW, a signal, which looks like this, will appear on the screen:
- the RSI retracement level of 70 and the forecast future downward movements
- the price breakdown of the MA is below
- the MACD movement intersection, with a decreasing slope:
The choice of expiration periods
Using the M1 interval price formation, like in our example, contract durability should be set in the range of 5-10 minutes. It can also be applied to TC with timeframes between 15 to 30 seconds, in that situation contract durability can be decreased to 3-5 minutes. Applying the aforementioned parameters, this method ensures 85% closed contracts in profit.
In order to best control risk, it is necessary to follow the standard money management norms, specifically not to select an option which is more than a maximum of 5% of your deposit. When trading with a small base of capital the total sum should be reduced to that of the lowest. For instance, on the Binomo platform, the lowest option for brokers is 1 USD, which is convenient for those without much means.