Author’s strategy for Binary Option trading “Moro” is another tool, which is based on the use of trend analysis methods.
At the heart of this strategy is the use of two indicators: Alligator and Aroon. Both of these tools are trendy and allow you to open long-term positions in the direction of the main trend. Both of these indicators contribute to the definition of the trend, but in strength, size and capabilities Alligator may be nominated in the first place, as the main tool in conducting technical analysis.
For a proper understanding of the opportunities offered by “Moro” look at the tools that form the basis of this strategy.
Alligator consists of three lines:
- blue – jaw
- red – teeth
- green – lips
Consistent location of these graphs indicates the presence of upward or downward trends in the market. In fact, we can talk about that as soon as the Alligator opens up – buy a binary option on the increase, if the indicator is disclosed down, respectively, a binary option is purchased on the decrease. These basic trading parameters are relevant for use in the strategy of “Moro”.
Aroon is mostly based on work with strong zones, which are in the range from 85 to 100 and from 0 to 25. Accordingly, if the indicator lines lie sequentially in these areas, it is possible to speak of forming tendencies towards which movement it is possible to trade binary options.
When we understand the basic principles of trade according to the considered methodology, we can distinguish the basic rules of the Moro strategy, compliance with which is mandatory.
Purchase of PUT Binary Option
- Alligator should have a clear sequence of the downtrend. This is achieved by the following arrangement of lines from top to bottom: blue – red – green.
- The Aroon blue line is above 85 and orange is below 25.
Purchase of CALL Binary Option
- Alligator should have a clear sequence of the uptrend. This is achieved by the following arrangement of lines from top to bottom: green – red – blue.
- The Aroon blue line is below 25 and orange is above 85.
Speaking about the expiration of the lot one should be aware of those distinctive features that are specific for trend indicators – the possibility of long-term perspective. This suggests that the trend that was emerged and confirmed by strategy “Moro” signals is a consistent and sufficient impulse to a strong movement is provided. As a result, we are talking about buying a binary option on the 10 levels ahead. Thus, if the analysis is based on a 30-minute time frame it is necessary to buy a lot for 300 minutes or 5 hours. This is enough for trend to gain the power and to provide a momentum in the direction of our entry into the market.
Any trading methodology has its advantages and disadvantages that uniquely characterize it. “Moro” gives a very few signals, and it is desirable to use it only in the trending market, but the signal passability is very good and its working principles are based on the fundamental postulates of technical analysis.
The most important thing is that the examined technique is very profitable in the long run, and even in case of situational losses they are covered by a subsequent profit.
That’s all for now. Got any questions? Just ask the expert!