Trading Strategy «InterMA»

June 27, 2018 posted in Binary Options Strategies • No Comments

Moving Average is quite a primitive tool at the first sight. Despite of its simplicity though this indicator is very powerful. The secret is in use of right combinations of several lines with different period. «InterMA» strategy is based on use of 2 moving averages.

Performing analysis and generating forecasts don’t need any auxiliary services. The existing services of the trading platform Binomo are sufficient for that. This is the advantage of the strategy, especially for newcomers.

Briefly about moving averages

The Moving Average line is an averaged price index for a certain time period. This value shall be given in figures. Each period unit in the moving line settings is equal to one candlestick. For instance, if the time length parameter is 10, it means the value of moving average may be easy defined averaging ten latest prices on the chart.

Similar calculations traders made manually as far back as on real stock and currency exchanges many decades ago. But now the modern computer technologies let us perform calculations automatically, granting for a trader a relief from routine and making him focus just on the market analysis.

Prearrangement

Trading absolutely any asset is possible. Optimally fitting are currency pairs with dollar, or CRYPTO IDX. The last option is the best choice for short time intervals — up 15 to 30 seconds. So, the indicator «Moving average» (MA) shall be added to the chart, 2 lines:

type: Exponential, period — 22, color — yellow;
type: Exponential, period — 12, color — red.

The advantage of this strategy is that it works with absolutely any time frames and currencies. Yet the longer is the time interval, the more percentage of signals will pass through. Trading on minutes chart is the best option.

Purchase principles for «Up» option

Quick (red) moving average shall cross the slow (yellow) one below. The cross point is the signal to enter the market. Purchasing an option shall happen at once or after the alert candle stick closed. If there is more than one price assessment appeared on the chart from the moment of red moving up came out, a deal isn’t supposed to be open as the key point is already missed.

The sample of a signal is shown on the image above. Here is the obvious increase in the rate throughout 8 candle sticks is displayed.

Purchase principles for «Down» option

The start of a short term descend trend is indicated by Moving Average lines crossed in inverse order. The quick line shall break the slow one from above, then go down. The cross point is the signal to open a deal.

The signal strength depends on the initial distance between the lines. The longer it is the stronger will be the pullback. In the situation considered on the samples the signal of price increase was more strong – the difference isn’t that big, yet it’s visible. If two moving go nearly along for the long time, it means the market is in flat state. In such situation the trading signals shall be ignored.

Trading passes at best during the highest volatility. For currencies this is the period of American-European trading session. Cryptocurrencies may be traded 24 hours, there are no such visible cycles.

The sample of trading with the strategy

For show and tell of the scheme considered we will close a deal so to say in «real» time, purposely for this article. The trading is executed on real deposit. Since the minimal time frame of 15 seconds was chosen, the preference was given to the asset CRYPTO IDX. It was the best choice for such a small interval.

After quite a big difference 2 indicators Moving Average converged. We buy the «Up» option for 60 seconds.

A minute passed. The price kept increasing despite of little correction. We received our 79% pure yield from the investment. The signal completely equaled the hopes. This way works for gaining up to 70% right points to enter the market.

Money management and expiration rules

There are no special tips on this points. The strategy is universal and perfectly fits for different trading approaches. Picking the deal expiration term the trader shall look to the pattern — the option lifetime shall be equal to 4–5 candle sticks. You may trade with intervals 15 and 30 seconds, also 1 and 5 minutes. The expiration term in this case shall be 1, 2, 5 or 20 minutes respectively.