Trend Reversal – is another binary options strategy, which does not use indicators. This trading strategy is designed for day time scale. It should be noted that this strategy is not the breakdown, but a reversal one. The point of this trading system is to catch a trend reversal and make a profit.
It should be noted that the binary options strategy Trend Reversal is really very easy to use. It can be used not only by professional traders, but also by those who have just started their first steps on the market and do not know the subtleties yet. The absence of indicators in the strategy simplifies it even more.
Often on the market there are situations when the current market movement is exhausted. Of course, the price can still update the minimum or maximum, but it happens more of inertia and is no longer supported by the sentiment of market players. At such times, we should expect a quick reversal of the main trend. The point of this strategy is that the trader will not trade on the daily trend, but will wait for its reversal. There is only one condition that must be followed. Purchase of the option may be performed only if the daily candle overcomes the maximum or minimum of the previous daily candle.
So, if the daily graph has one or more bullish candles, we can expect that in the nearest future a bearish one will appear. At the same time, it is recommended to buy a Put option only when a bearish candle goes beyond the lower limit of the previous bullish candle. The breakdown of the previous low of the day will be the trading signal. With regard to the term expiration, you can install it either a few minutes or until the end of the day.
The same applies to the situation where the graph has several consecutive bearish candles. In this case, we can expect that the market will soon reverse. It is only recommended to buy a Call option if the current candle go beyond the previous maximum. Trading signal to buying a Call option will be the breakthrough of the top level of the previous candle.
Knowing these simple aspects can be quite profitable in binary options trading. There are no other secrets in this strategy. As can be seen, it is really simple, but very effective. The most important thing is to keep in mind the conditions of Money Management in order to save your capital.
That’s all for now. Got any questions? Just ask the expert!