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Aspects of the Double Cross Strategy

Among the vast array of trading systems, reversal strategies hold the utmost popularity in the realm of binary options trading. This preference arises from the fundamental importance of price direction rather than the precise number of points it may fluctuate by. Consequently, when a trader successfully identifies a reversal in a timely manner, they enter a position at the inception of the movement, reaping profits at the expiration date’s conclusion.

The Double Cross Strategy offers an effective approach for monitoring the development of a correction or reversal of the market. The strategy got its name from the intersection of signal lines within two well-known indicators, ADX and MA (Moving Average). Notably, both tools are readily available as standard advisors on the Binomo platform. This accessibility ensures that all the broker’s clients can easily put this new technique into practice, as we shall discuss in detail.

How to set up the indicators?

The ADX indicator serves to assess the strength of a trend. However, in the context of the Double Cross strategy, it’s not the primary line but the auxiliary ones that come into play.

To execute the Double Cross strategy, you should focus on the crossovers of the +DI and -DI lines. Trade entry occurs in the direction aligned with the positive line’s movement.

Nevertheless, a noteworthy caveat is that this indicator sometimes generates false signals. This can manifest as the lines initially converging, indicating a potential intersection, only to subsequently diverge in separate directions, as illustrated in the figure below.

Unfortunately, under such circumstances, traders often encounter losses. However, the creators of the strategy have implemented safeguards against this by introducing an additional indicator into the mix.

To enhance the reliability of the signals, Moving Averages (MAs) with periods of 15 and 5 are employed as a filter. The confirmation of an ADX signal is contingent on these MAs intersecting appropriately.

Concerning the ADX indicator itself, it can be added to the chart with its default parameters, as these parameters are not particularly influential in this context.

First, remember that the strategy is applicable to a broad spectrum of assets. Second, it is recommended to execute trades on shorter timeframes, ranging from 1 to 15 minutes. The expiration period should be no less than the time required for the formation of three candles. You can choose the chart display to your liking.

How to Trade with the Double Cross strategy

Let’s now delve into the mechanics of trading with this approach, and it’s quite straightforward. The method’s name “Double Cross” catches the core of the strategy: traders wait for two intersections of the indicator signal lines.

Consequently, a CALL contract is done when the +DI crosses above the -DI, and simultaneously, MA5 intersects MA15 in the same upward direction.

A PUT should be executed when the -DI crosses above the +DI, and concurrently, MA5 intersects MA15 in the same downward direction.

It is recommended to use timeframe equal to the formation of three candles.

The Double Cross strategy stands out as one of the most accessible systems for signaling a potential trend reversal or correction. Simultaneously employing two distinct indicators with different calculation formulas and functions significantly enhances the probability of a successful transaction outcome. Hence, this system is widely regarded as one of the most effective options available in the market.

Caution! This article is not intended to be investment advice. No strategy can guarantee 100% correct trading results. A successful trading result in the past is not a guarantee that it will be repeated in the future. Any information contained in this article is for informational purposes only.

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