Germans are known to produce quality products most especially quality cars. When it comes to Binary Options, the Germans have also developed their very own strategy. Let’s take a look at this German strategy.
USING TREND MOMENTUM STRATEGY!
The first thing you need to consider when using this strategy is an indicator that already comes with Momentum platform in Meta Trader 4. You will then need to use an 18 setting in this indicator. You also need a 100 level set. To do this, you have to click the indicator twice then choose Levels and then drag the horizontal line manually or add one at one hundred. The next indicator that you need to use is the Exponential Moving average. This should come with a twenty four period. This is actually a Meta Trader 4 default therefore you won’t have any problems on using it to charts. When you have done all of thee you need to know what the strategy tells you concerning the market.
The strategy makes use of an hourly rate. When an H1 candle completely closes above the EMA 24 or even eighty percent above it and its momentum is more than level 100, you can then purchase a Call that expires in a day. Moreover, when an hourly candle closes below the EMA 24 and its momentum is below its 100 level then you can purchase a Put with a daily expiration. When you look at it evidently, this strategy has very clear rules with regards to time frames being used. It also has clear rules on expiration times. This is because of the fact that it was specifically created for Binary Options. Thereby, you do not have to think about adapting it. As a matter of fact, it is most likely best to just let it be and not make any huge changes.
WHY IS THE TREND MOMENTUM STRATEGY NOT GOOD?
The ever ranging market is the strategy’s biggest downside. Moreover, it has a many fake signals that come in such market. Its title even points towards the idea that it is a strategy and must not be used for that reason. Nonetheless, even in an ever changing market, Momentum indicator will whisk you off from bar trades. You can do away with the eighty percent rule. For some traders, a better signal is provided by full candles that close on top or below Exponential Moving Averages.
WHY IS THIS TREND MOMENTUM STRATEGY GOOD?
The great thing about this strategy is that any trader out there can simply use it and trade. Above it, success rate when using this strategy is quite high. Thus, it is an ideal way for any novice trader to be used to Binary Options. But, you also need to use good management rules. The idea that it was created for Binary Options doesn’t offer any space for mistakes when dealing with expiry times and time frames because these are already included in the strategy’ rules. When you use hourly charts, the Trend Momentum Strategy clears a big part of market noise.
The strategy does not seem to be very impressive. It is very simple and generates many false signals. However, after using it for a while, you will actually notice that it’s over simplicity is a good thing. One trader is actually different from each other. So it is ideal for you to test it before trading it.