Impulse Reversal Strategy
Many binary traders are dissatisfied with the fact that in the long run, the chosen trading strategies for options turn out to be unprofitable or do not provide the stated result. This forces participants to interrupt odd jobs and find alternative and potentially less profitable ways to allocate capital.
Developers of binary systems often explain the failures of users by the fact that they do not fully comply with the established rules (miss signals, do not comply with risk management, etc.). If 5-7 years ago such an explanation seemed quite logical, now everything is different. Unemployment and the lack of jobs with decent pay simply force many people to trade professionally.
Oddly enough, but even this approach is useless. Most strategies remain unsuitable for regular practice with large capital. The main reason explaining what is happening is the stereotyped rules that oblige the trader to always find the exact moment to enter and exit the position.
Remember! The market is a complex multifunctional organism. To make a correct forecast, it is not enough just to cross the indicator lines in any direction. First of all, it is important to understand what is happening.
In addition, do not underestimate such a phenomenon as infobusiness – a commercial direction, where the main product is temptingly packed information. Let’s think about what most people are interested in in the first place? Naturally, the ability to make money easily and quickly. Against the background of such demand, “super-strategies” are created, which in most cases have not even been tested in the real market.
Now let’s get acquainted with the technique, which is called “Impulse reversal”. Its key feature is that each market entry is based primarily on an understanding of the market. When you become familiar with the trading rules, you don’t have to apply them right away. Be imbued with the proposed logic and, if possible, transfer this idea to the system with which you are currently working.
Watch a handy video review describing how the strategy works:
Preparatory part
Below are the settings for the hourly chart of the euro/dollar pair. Similarly, you can work with absolutely any asset. To track the current trend, add a simple moving average with a period of 50 to the selected platform (it can be either MetaTrader or a live binary market chart).
In manual mode, mark up the chart and determine significant price levels. We kindly ask you not to use additional indicators for this purpose. The finished chart will look something like this:
Now let’s look at the theoretical basis on which the Impulse Reversal is based. First of all, we must learn how to identify zones of price consolidation. On the chart, they are presented in the form of a cluster of candlesticks at some significant level.
At the same time, we will pay attention to places that are at the top or trough of a developing trend. In other words, we will find the boundaries, after reaching which, a reversal occurs in the market.
An example of price accumulation at a significant resistance level
Pay attention to the moving average. When the market consolidates and prepares for a reversal, it loses its previous slope prick and moves almost to a horizontal position.
This theory is enough to move on to the study of trading rules.
Buying a CALL option
- We are waiting for the moment when the price accumulates in the area of a strong resistance level, and the moving average moves from an increasing almost horizontal state.
The presence of these signs means that the upward momentum has exhausted itself and traders are starting to take profits. Accordingly, the market is preparing for a reversal and movement in the opposite direction.
- In order for the signal to be confirmed, we need at least one candlestick to close above the moving average with its whole body.
- At the same time, the distance to the support level should be more than 70-87 points (the figure is approximate, determined at the discretion of the trader).
Importantly! The specified number of points to the support level is relevant only if you work with the euro / dollar. To calculate the distance for another asset, focus on the volatility table.
Volatility is the average range that an asset travels over a fixed time period.
- When all the conditions are met, we wait for the appearance of a new candle and conduct an increase trade.
- Expiration – 24 hours (it is highly undesirable to reduce this period).
- One bet should not deduct more than 3% of the deposit.
If the candlestick has fixed below the moving average, but the distance to the resistance line is small, then the trader has several options:
- skip the deal;
- wait for the breakout of the specified level and then follow the general rules of the strategy.
Example of buying a CALL option
Selling a PCI option
- We are waiting for the price to stop in the area of a strong support level.
- We check that the moving average has moved from a decreasing almost horizontal state.
- We do not take any action before the price fixes below the moving average with the whole body.
- We measure the distance from the current price value to the next support level (for the euro/dollar pair, it should exceed 70-87 points).
- If all the conditions are met, then with the appearance of a new candle, we carry out a deal for a fall.
Example of selling a PCI option
As you have seen, the trading strategy for binary options “Impulse Reversal” does not contain magic indicators and conditions. Everything is simple and logically justified:
- the trader observes the market and waits for the moment when the trend ends and gradually begins to move into the correction stage;
- Further, with the help of a filter system, it finds the correct entry point and sets a sufficient expiration period that allows a new impulse to develop.
Trade wisely and look for your style!
Strategy “Impulse reversal” at the broker Olympus Trade
In order for this reliable strategy to bring you a comfortable job and high income, work in the terminal of a trusted broker Olympus Trade, which has the necessary functionality: a personal account with analytics, indicators (MA, Parabolic SAR, MACD, RSI, Stochastic and Bollinger bands), a choice of options and expiration (from a minute to an hour), the ability to test strategies, use market reviews and an economic calendar.
Read the latest reviews about the broker Olympus Trade, as well as ask questions to professional traders here. You can see what the terminal workspace looks like in the image below.
A detailed review of the Olymp Trade broker is here.
Go to the official website of the broker Olymp Trade here.
In order to buy a
CALL
option in the Olymp Trade trading terminal, follow these steps by going to the olymptrade.com website and preparing an option by specifying:
- Type of asset
- Expiration
- The size of the bet
- Forecast of quote movement: UP
- Click the “buy” button and follow the results.
In order to buy a
PCI
option in the Olymp Trade trading terminal, follow these steps by going to the olymptrade.com website and preparing an option, indicating:
- Type of asset
- Expiration
- The size of the bet
- Forecast of quote movement: DOWN
- Click the “buy” button and follow the results.
Bonuses of the broker Olymp Trade
Trading binary options with Olymp Trade is profitable, the broker offers its users constant promotions and bonuses. Thanks to the prize funds, the trader can work even more on the site, without the risks of his cash capital. Now the broker is especially popular with the starting bonus, which doubles the deposit, which is offered to all newcomers to the platform. Replenished the account within an hour after registration.
Tagged with: Binary Options Strategy
