Trading binary options always involves the challenge of identifying optimal entry moments into the market. Experienced traders know that using proven indicators can significantly increase the chances of success in any trade.
The strategy named “Detective” employs a combination of two powerful tools: Parabolic SAR and DeMarker. These advisors help identify trend reversals and zones of heightened demand and supply, making them ideal for short-term trading.
In this article, you will learn about an effective methodology for trading digital contracts and the setup rules for the Binomo trading terminal required to implement it.
Trading Platform Setup
Before proceeding to market analysis and applying any strategy, you must first select the appropriate asset, timeframe, and correctly configure the indicators.
For trading with the “Detective” strategy, it is recommended to choose assets with moderate to high volatility. Suitable instruments include:
- Currency pairs (e.g., EUR/USD, GBP/USD).
- Commodities (gold, oil).
- Cryptocurrencies.
These financial instruments provide more trading opportunities due to frequent price fluctuations.
It is best to use a Japanese candlestick chart, as it clearly displays price changes and helps identify entry points more easily. The optimal timeframe for this strategy is M5 (5 minutes) or M15 (15 minutes), as it is designed for short-term trading.
Now, let’s address the indicator settings directly:
- Parabolic SAR – a trend-following tool displayed as dots above or below the price. It helps determine market direction and reversal moments. Keep the default parameters.
- DeMarker – an oscillator that helps identify overbought and oversold zones. Values ranging from 0 to 1 indicate when an asset is approaching the boundaries of its price range. Set the DeMarker period to 14 for more accurate signals.
Applying the Strategy in Options Trading
As you may have guessed, trading with the “Detective” strategy requires monitoring signals from both indicators — Parabolic SAR and DeMarker. These tools complement each other, allowing the trader to pinpoint entry moments with greater precision.
Conditions for Buying a CALL Option:
- Parabolic SAR: Indicator dots are positioned below the price, signaling an uptrend.
- DeMarker: Indicator value is below the 0.3 level, indicating excessive supply in the market. This suggests that price may soon begin moving upward.
If both conditions are met simultaneously, this constitutes a signal to buy a CALL option with an expiry time of 10 to 30 minutes (approximately two candles on M5 and M15 timeframes, respectively).
Conditions for Buying a PUT Option:
- Parabolic SAR: Indicator dots are positioned above the price, indicating a downtrend.
- DeMarker: Indicator value is above the 0.7 level, signaling asset overbought conditions. This indicates a potential start of downward movement.
When both conditions align, purchase a PUT option with a similar expiry period.
Conclusion
The “Detective” strategy represents an effective method for binary options trading based on time-tested indicators. Parabolic SAR helps determine trend direction and reversal points, while DeMarker identifies zones of extreme demand or supply, enabling traders to capture optimal entry moments. Thanks to this combination of tools, the strategy delivers precise signals and suits both beginners and experienced traders alike.
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.
