Forex Trading Strategy #55 (MACD Forex Binary Options Strategy)
There are many forex binary options strategies available in the market. Trading forex binary options is much simpler as compared to forex. There is no stop loss or take profit. You just need to get the market direction correctly. That’s all. Now this is a very simple forex binary options strategy that uses a few candlestick pattern in combination with MACD. MACD is a very powerful momentum indicator.
MACD basically comprises of a signal line and a histogram. Signal line is the plot of EMA (9) while the histogram is the plot of the difference of two EMAs 26 and 12. When the signal line crosses the histogram, price momentum changes! This is something very important for you to grasp. When the signal line crosses the histogram and goes below it, price momentum shifts from down to up. In the same manner, when the signal line crosses and goes above the histogram, price momentum shifts from up to down. This is the concept behind this forex binary options strategy. We combine a few candlestick patterns with MACD signal line crossover in this simple strategy. Let’s make it clear using a few live trading examples!
Take a look at the above screenshot. In this screenshot, there is a very nice pinbar candle and MACD changed color from red to white and the signal line crossed the histogram and went below it which is a signal that price has sifted momentum from down to up. So we buy a call with expiry of 15 minutes. You can clearly see the price is up after the expiry of three 5 minute candles.
Now just after an hour, there is another good trading opportunity. There is a very nice hanging man candle pattern and the MACD signal line crossed the histogram and goes above it which is a strong signal that price momentum has shifted from up to down. So we buy a put with expiry of 15 minutes. You can clearly see from the screenshot that price ended a lot down after the expiry of three 5 minute candles.
In this screenshot, again there is a nice pinbar pattern and as you can see the MACD histogram has changed color from red to white and the signal line has crossed the histogram and gone below it which is a signal that price momentum has changed from down to up. So we buy a call with expiry of 15 minutes. You can clearly see from the screenshot that price ended up a lot higher after the expiry of three 5 minute candles.
You can also trade this forex binary options strategy on M15 timeframe. In that case the expiry of the option should be 60 minutes. Read more live trading examples of this forex binary options strategy and download the MACD indicator shown in the above screenshots FREE that changes color when price momentum changes and gives a sound as well as a popup alert when the signal line crosses the histogram.