The Options Trading System «Seagull»
The trading strategy «Seagull» will undoubtedly please enthusiasts of the indicator approach of technical analysis. The system effectively works with all the assets of the foreign exchange currency market, bringing up to 85% of the profitably closed options. It will effectively work in the hands of the trader with any level of training.
«Seagull»: the very essence of the strategy
The technical basis of this system is represented by two indicators – Parabolic SAR and Chaikin Oscillator. They’re well known in this sphere. With the help of these technical analysis tools, you can determine the market turns and the optimal moments for making deals. The parabolic stop and turn system (the Parabolic SAR indicator) developed by Wells Wilder (Wikipedia), shows when the trend ends and a new trend starts. On the chart, it’s displayed in the form of points accompanying the price movement depending on the direction of the trend. If the trend is upward, the points are located under the quotes and they’re green. If the trend is downward, the points are located above the price and they’re red. Accordingly, the moment of changing the location of the points indicates a change in the price movement.
The Chaikin Oscillator demonstrates the mood of the market players, which is indicated by the location of its line relative to the zero level. If the line goes under zero axial line, the indicator shows the superiority of sellers, and if it’s over it, it demonstrates the superiority of buyers. Thus, the two indicators will inform you with their complex signal about a change in the market situation and suitable conditions to open your trading position.
The template setting
You can’t find the indicators used in the system on other brokers’ trading platforms. However, you can easily create an indicator markup for your market analysis with the help of the service https://tradingview.com. Here there are all the necessary tools to customize the necessary marking for the chart of the options trading system «Seagull». Also, the profitability of the technique depends on the broker’s platform used to transfer trading signals – it should execute trading orders without slipping quotations and ensure high yields of options. In this article, we will use the Binomo platform (you can try trading in the terminal Olymp Trade).
So, in the service of live charts, select a currency pair and apply to the chart the following indicators:
- SM_Parabolic SAR
- Chaikin Oscillator
The indicator settings shouldn’t be changed, and the chart timeframe should be set to the interval of 1 minute. After the configuration, we get the working template:
Trading binary options with the strategy «Seagull»
So, having set up the template, you can proceed to trading binary options. To do this, you only need to open the same underlying asset and the interval on the broker’s platform. Then, on the platform, you can define trading signals, which won’t keep you waiting – the Parabolic SAR points will change their position relative to the quotes, and the oscillator’s moving average will hit the zero dashed line.
You should purchase the UP option when:
- The Parabolic SAR points will start gathering under quotations and become green,
- The oscillator’s moving average will break the dashed line up:
Immediately make the UP bet on the broker’s platform after these indicators:
You can buy the DOWN option when:
- The Parabolic SAR points will start gathering above the quotes and become red,
- The oscillator’s moving will break the dashed line down:
Immediately make the DOWN bet on the broker’s platform terminal after these indicators:
Take advantage of the unique trading simulator – the broker’s demo-platform, which is a simulator of real trading!
The expiration time
Given the relevance of the indicators and the 1-minute chart timeframe, the option expiration should be set in the range of 5 minutes-10 minutes. You can also use the 5-minute timeframe, for which the optimal expiration time will be the time for which the market will form 3-4 candles, which is 15 minutes-20 minutes.
The standard rules of money management will help you to avoid large losses. Limit the amount of each option to 5% of the volume of your trading deposit. With a small trading capital, it’s highly recommended to opt for the minimal trading bets.