Another very simple but still effective strategy for trading binary options, based on the crossing of moving averages. This strategy can be applied to any binary options, or more precisely, it can be used for any currency pair. Signals for buying or selling using the tunnel strategy are viewed from at least the H1 hourly chart.
Tools for determining signals:
- exponential moving average EMA with a period of 18 – color it red
- exponential moving average EMA with a period of 28 – color it red
- linear weighted moving average WMA with a period of 5 – color it blue
- moving average WMA with a period of 12 – color it yellow
- RSI indicator with a period of 21
From the exponential moving averages with periods 18 and 28, a tunnel is formed by two red lines that will help find the start and end of the trend.
The moving averages WMA with periods 5 and 12 indicate when to enter the market, as well as allow determination of the strength of the current trend.
Rules for opening a deal (purchasing a binary option)
Purchase or sell an option only when the red line tunnel crosses or becomes very narrow, almost one line.
Purchase a “Call” option only when the WMA moving averages with periods 5 and 12 cross the red tunnel formed by the EMA moving averages from below upwards. At the same time, if the WMA moving average with a period of 5 crosses the WMA moving average with a period of 12, it means a stronger buy signal.
To purchase a “Put” option, it is necessary to look at the crossing of the EMA exponential moving averages with WMA moving averages with periods 5 and 12 downwards. Also, if the WMA moving average crosses the WMA line with a period of 12 from top to bottom, it gives a stronger sell signal.
At the same time, it is necessary to watch the RSI indicator with a period of 21, for selling it should be below the 50 mark, for buying above this level.”,
“excerpt”: “A simple yet effective binary options trading strategy based on moving averages and trend analysis.”,
“slug”: “binary-options-trading-tunnel-strategy”,
“faq_html”: “
FAQ
What is the tunnel strategy in binary options trading?
The tunnel strategy uses moving averages to identify trends and potential entry points for binary options.
How do I determine when to buy a call option?
You should buy a call option when the WMA moving averages cross the red tunnel from below upwards, indicating a strong upward trend.
How do I determine when to sell a put option?
You should sell a put option when the WMA moving averages cross the red tunnel from above downwards, signaling a strong downward trend.
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