Oscillator MACD – is a classic indicator of technical analysis which is well-known and recommended in practical trading. This particular oscillator’s figures help traders to determine the power of a current trend as well as possible points of its return. These figures are universal which means that it can be used on any time-frames starting from options with 60 seconds expiration time and finishing with long-term monthly options. MACD trading strategy is perhaps the best when trading binary options.
Using MACD trading strategy is just ideal and perfect for options with mid-term expirations, yet don’t forget that an indicator can be easily used on a longer time-frames. One more advantage of this trading method is that it is very safe. Because MACD – is an indicator of trend power and all a trader should do is just to open positions in the direction of a leading trend. Additional security of MACD trading strategy is provided by the fact that oscillator figures are confirmed by signals (when 2 SMA- simple moving averages cross).
How to Trade Binary Options with MACD Trading Strategy?
Before you start trading, you should know which asset you want to trade with. In order to minimize the risks, it is advised to select volatile assets which are perfect for classic technical analysis: currency pairs EUR/USD, GBP/USD, shares of large companies e.g Google, Apple, Coca-Cola etc.
After an asset is chosen, open its chart/diagram on a platform. A great idea would be to begin trading from 5 minute-chart thus testing other time intervals and getting experience at the same time. The best type of a chart is of course Japanese candles. The chart should have the following indicators:
- SMA – simple moving average with a period of 50;
- SMA – simple moving average with a period of 100 (you can paint the indicators lines in different colors for better understanding, distinction and comfort);
- MACD with parameters 12/26/9 – it is compulsory to turn on a regime of histogram depiction;
Now your platform is ready to work.
Resume: Safety of the Strategy
- Always follow the rules of money management and don’t risk more than 15% in one trade;
- Make sure you set all the needed indicators on a chart;
- Have some practice on charts;
Binary options trading with the usage of MACD trading strategy is suitable for beginners as well as people who have a huge desire to earn on binary options without learning too much of a theoretical part. Using this particular strategy wisely will lead to high stable incomes and profitable trades.