The Currency Pair MACD Strategy strategy offers an easy system which utilizes a pair of widely recognized and highly regarded indicators. Although the strategy is designed with currency pairs in mind, it could be paired with stocks, indices, and commodities as well. The strategy is centered around Parabolic SAR buying and selling signals which are verified by MACD. Standard settings are used for earch indicator, along with 30 minute bar charts.
How To Use the Currency Pair MACD Strategy
This strategy happens to be quite simple to use. The initial half of the signal is derived from observing the parabolic sar. Whenever the parabolic sar provides a Call or Put signal, be prepared to trade in the bullish or bearish direction which is shown. The real signal arrives whenever MACD verifies that signal. Whenever parabolic sar provides a purchase signal, MACD has to cross over the zero line from underneath to validate. A weakened MACD signal shouldn’t be taken. The exact same holds true for reversals. Whenever parabolic sar offers a sell signal, you’ll need to wait for the MACD zero line to cross from above.
An added benefit of this strategy would be that it additionally offers some guidelines for exits. The exit signal is given when the MACD traverses back below the zero line or when the market the market has been ranging for a period of time. You cannot use these movements as sell indicators, but they can be put to use in other ways. Sell signals might be an opportunity to make use of a hedge or straddle binary options strategy, possibly resulting in a pair of in the money trades.
Advantages Of the Currency Pair MACD Strategy
This strategy utilizes two excellent indicators. It also makes use of more than one indicator and does call for confirmation. Any currency pair can be used, and with just a bit of modification, it could apply to other types of assets. It may be employed in multiple time periods and does offer you signals for both hedges and straddles. Simply put, it represents the basic attributes which go hand in hand with a dependable binary options strategy.
Drawbacks Of the Currency Pair MACD Strategy
Two potential drawbacks do exist. First off, this strategy does account for any trend. Ideally, there should be at least some concern related to any trend or at the very least a unity of signals for various time frames. This would take care of many potential problems. MACD is recognized as a lagging indicator, so holding out for a zero line cross as affirmation could result in opportunities being missed. If you happened to be trading along with the price trend then a weakened MACD signal could possibly be used with some success.
Overall, this is a solid binary options strategy. It presents clear and easy to recognize signals. Even so, you may want to use it in combination with some means of determining a trend in order to avoid false signals. This strategy is perfect for the skilled trader who wants to test out trading with shorter expiry time periods. Novice traders may also use it, but may want to consider doing so along with longer expiry times until it has been completely mastered.