While the majority of traders across stock, commodity, and currency exchanges commonly adhere to the practice of trading within the current trend, binary options don’t quite conform to this traditional approach.
The most effective method for generating profits in the world of digital contracts revolves around capitalizing on trend reversals, a concept that inherently makes sense. Typically, these contracts have very brief lifespans, making it sufficient for the market to undergo a burst of either upward or downward price movement in order to secure a profit. Such scenarios often coincide with trend change.
Furthermore, over the years, a multitude of techniques have been developed to predict trend reversals or corrections. Initially designed to help financiers avoid entering into trades at the peak of a trend, these systems have now evolved to serve the purpose of profit generation with the advent of electronic contracts.
In this article, we will introduce you to one such strategy known as “Change”, which is suitable for deployment on virtually any trading terminal, including the Binomo platform.
Learn more about the Change Strategy
This strategy hinges on one of the trend indicators renowned for its popularity and reliability: the Parabolic SAR. It excels in providing real-time, highly precise insights into the market’s current direction or potential reversals.
What sets this system apart, as we’ll delve into in this article, is its ingenious incorporation of a supplementary tool. This auxiliary feature, the Stochastic oscillator, serves as a “safety net” within the strategy, effectively filtering out erroneous signals, thereby safeguarding the trader’s capital.
As for the workspace configuration, it consists of the following components:
- Chart type: Bars or Japanese candles;
- Asset options: Currencies, shares, or cryptocurrencies;
- Timeframe: Five minutes;
- Preferred trading session: European or American.
Configurations for the indicators are as follows: As for the indicators, follow the instruction:
- Parabolic SAR: Step value set at 0.02;
- Stochastic: Parameters for periods and slowdowns are 14, 3, and 2, respectively.
With these settings in place, your trading terminal setup is complete, and you are ready to proceed with actual trading.
How to trade with the Change Strategy
The name of this trading strategy is not arbitrary. It derives its name from the Parabolic SAR indicator, which signals a potential change in the trend or a correction when its points change position relative to the chart – either above or below.
For instance, during an uptrend, the emergence of a new dot above the price bar signifies the onset of a reversal or correction, whereas in a downtrend, the opposite is the case. The Stochastic indicator in this strategy is conventionally employed in conjunction with the overbought and oversold zones.
In light of the above, the trading algorithm for the Change system is outlined as follows:
- Initiating a CALL contract occurs when the Parabolic SAR point appears below the price bar, and the slow Stochastic line exits the 0-20 zone.
- On the flip side, a PUT contract is acquired once the Parabolic point materializes above the candle, accompanied by the Stochastic exiting the overbought zone.
The expiration time frame is limited to a maximum of 10 minutes.
Numerous trader testimonials indicate that when this system is correctly applied, it yields remarkably impressive results. However, it is crucial to emphasize the importance of adhering to sound money management practices.
In conclusion, the Change trading system, with its short expiration period, offers promising results when employed effectively. Nevertheless, responsible money management remains a critical aspect of successful trading.
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.