Forums Binary Options Strategy

Trading Made Simple

AustinAustin Posts: 5
edited July 2014 in Binary Options Strategy
Hello everyone, I’ve been kind of quiet for a while now, but I’m ready to be a little more active in the forums again. I’ve been dabbling into the Spot world of trading currency here lately and paying attention to higher time frames. I will probably post some about Binary Options and Spot here and there as I notice good setups and trades.

I’ve been paying close attention to a thread over at Forex Factory called Trading Made Simple. It particularly caught my eye and I began to read the thousands of posts from day one up until now. It took a very long time but what I got was a good understanding of the method and I’ve made a slight modification to suit my personality. The core of the system is un-altered but I wanted to share and see if anyone wanted to try this with binaries. I know several traders that use this method successfully on the higher TF’s. The originator of the thread (Eric AKA BigE) was against using lower TF’s, but I believe this method can be used on lower TF’s with a few simple mods that I will explain. I hope that everyone who see’s this will try it out and see if it’s worth using with Binaries. I will attach the indicators in a following post.

The core indicators consist of the TDI (Traders Dynamic Index), Stochastics, and Heiken Ashi candles. Dean Malone developed the TDI, but with this method there are several things removed from the original indicator.

Entries: *When Green crosses Red on the TDI at the beginning of candle*
Long (Call): Green crosses red on the TDI and is heading up with a sharp angle (think of the face of a clock, if the angle is in the 12pm – 2pm position), and PA agrees on the first or second candle of the move, enter the trade.

Short (Put): Green crosses red on the TDI and is heading down with a sharp angle (think of the face of a clock, if the angle is in the 4pm-6pm position), and PA agrees on the first or second candle on the move, enter the trade.

Exits: *When the Green line goes flat, hooks over or no longer has a sharp angle*
Note: This only applies to Spot trading and not binaries since they have a fixed expiry.

Now what I explained above is basically the core method, and some discretion needs to be used which is why I mentioned PA (price action). For anyone new to this method, every single cross of the TDI will not result in a winning trade. You can use any form of price action you want whether its S/R levels, Fibonacci levels, candlestick patters, etc. The Stochastics are ONLY used for directional confirmation.

Now to integrate this with Binaries, I think that if you look at a higher TF such as 30M and see a setup, zoom in to the lower TF such as 5M and look for a setup in the same direction to enter the trade on a 30M expiry. My reasoning is if you get a strong move on a higher TF, it’s more likely to continue that direction for a few candles and by zooming in to a smaller TF, you can get a much better entry. Price action is waves inside of waves all the way up to the highest TF, so naturally if a higher TF shows a solid move then on the smaller TF you will have more obvious pullbacks that you can watch and wait for the continuation. The attached screenshots show where a Short (put) trade would have been taken. The entry is shown by a red vertical line on the 30M TF and when you zoom in to the 5M TF you will see you should probably wait until price starts to move again before you enter a Put.


  • AustinAustin Posts: 5
    During the evening if I trade, I usually focus on Spot Forex because if I see a setup on a much higher timeframe, I will usually set the trade with a stop loss at the most previous price swing point and go to bed. I usually do this with the 4H timeframe that way when two more candles develop and show up it will be morning time so when I wake up I can check on the trade. Usually I will exit before I go to work, as I cannot monitor the trade throughout the day. Now I didn’t make any BO trades, but I can mention a bit how this could have helped a BO trader. As we all know (or should know), if you look at a higher timeframe than the one you are entering your trade with, you will get a better idea of what direction price is heading. If the highest timeframe shows a bullish move, I guarantee you every time frame below it will be bullish overall. Just think of waves inside waves and the highest TF is the large wave and the 1M TF is the smallest. The point is, if you trade in the direction of the higher timeframe price direction, your probability of having a winning trade is much greater. Focus on going with the flow if you are just starting out. Counter-trend trading should come later when you are more comfortable and accurate at entries and be fully aware that you are in a counter trend trade. Counter-trend trades should be watched like a hawk for a sign of continuation so you can exit.

    My trade I took last night just before bed was with the pair EUR/JPY, and as you can see below I entered on the open of the second red candle. The TDI indicator had an excellent crossover and the Stochastics was heading down, which confirmed my thoughts on where price was heading. If you look back at the overall trend you also see price is bearish, so this also adds to my trade. As I said earlier, I let the trade run all night, and when I woke up I checked again and exited my trade before I left for work. Another reason I exited because if you look back in time around January of this year, price showed a significant support level and price bounced away from it, so price was likely to do it again. If you look at the 4 hour TF, I was correct that price would bounce off that significant historical support area so it was a good idea to exit before I went to work. I would have hated to come home from work and see that my trade hit my S/L when I was in good profit this morning. This trade in terms of pips netted me +47 Pips. You can find the indicators by googling them, as i cannot upload MT4 files here.
  • AustinAustin Posts: 5
    Has anyone tried this out for themselves?
  • AustinAustin Posts: 5
    Hey everyone, i made one BO trade this evening. The pair was USD/JPY and i was actually not going to trade tonight until the pair suddenly started to gain momentum. I originally saw the move on the 30 minute chart so i zoomed into the 5M chart to look for an entry. The Call was supported by the higher TF as well as the 5M TF. The rules of the method were met, green crossed red at a good angle (about 1pm), the Stochastics were heading up to add confluence. I entered on the second blue candle and not too long afterwards price had a small retrace then it took off again. The reason i had confidence in this trade is because i had an entry signal on the higher TF and the lower TF. It's fairly simple as far as the method goes. There's not a whole lot you have to consider for an entry. Price didn't do much for the previous several hours, so a large bullish movement like that had some momentum with it. If the market is moving in a direction with decent sized candles, it will likely continue for some time. With the signals from this method, you should be able to catch some of that move early on. I have placed an arrow on the chart to show which candle i entered on, and as you can see, i could have added several other call trades as well in this move to maximize profits. I wish i had been at the computer the whole time, but i was eating supper. Oh well, you cant catch all the moves. Good day all!imageimage
  • bo_brownbo_brown Posts: 551 ✭✭
    Nice trade. Please keep posting your progress.
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