Basically a price can vary between two ranges. The highest and the lowest range.
When the value is near the highest range, it will tend to fall, and when it reaches the lowest range it will tend to rise.
Using Break or Retracement in Binary Options
– There are two ways to use break or retracement in Binary Options:
Short Duration Options – For 5, 15 or 30 minute time intervals. The market must have a neutral trend.
We should use the same indicator that is used for 60 second operations .
We can also use a specific robot that determines the inputs for this type of periods.
Both the indicator and the Robot work on an MT4 platform and will be made available in the training classes I give.
Long Duration Options – For 4h or 1 Day time intervals.
The market does not need to have a definite trend, it just has to have exhausted indicators that predict a break or retracement.
We can also use a specific Robot that determines the inputs for this type of periods.
– The basic idea is to find points that form resistances, causing momentarily a break.
This break may be just for the price to go back to gain strength and follow its movement, or it may be a complete reversal of the trend.
I often use this strategy in Forex , especially for 4 Hours and 1 Day. For those who trade, for example in the 60 seconds , in the News or in Following the Trend , you can use this strategy in end-of-day trading.
It is interesting to use as it fits perfectly with other strategies commonly used over shorter time periods.
– In this asset (EURUSD), 7 trades were made, 5 of which made a profit (the green bars) and 2 lost (the red bars).
– Each operation lasts 24 hours.
– The robot gives the input signal at the end of the candle and we just have to set the binary option by choosing the duration of 1 day (expiration time).
– Since in this example we work with long periods of time, we must use several pairs, or we must combine this strategy with others. Per month, each asset allows to put on average 4 or 5 operations.
Conclusion Strategy Break or Retracement
This strategy is interesting because from the point of view of the percentage of transactions in profit is high.
If we use long expiration times, such as 1 Day (as in the example above) the hit percentage goes up, because the longer the Binary Option expiration time, the easier it is to predict asset price movement.
Usually those who use this strategy either use a higher risk (5%) of the value of the account on each transaction and multiple assets at the same time, or use other strategies at the same time to diversify and have more trades per month, thereby enhancing the profits.
Although the operation of the two markets (Binary Options and Forex) is different, my opinion is that applying this strategy in Binary Options works well, especially for 4 hours or 1 day.
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