Binary Options Currency Pairs

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SD Binary Options Trading Strategy – Profit on Major Currency Pairs

Full Review of the SD Trading Strategy for Binary Options Trading

The strategy I am going to talk about today was designed to use on all major pairs. “The Majors” are the most commonly traded Binary Options currency pairs and include EUR/USD, GBP/USD, AUD/USD, USD/JPY and others, but I would say these are the most important. Because they are so frequently traded, the Majors are very active and volatile, offering many opportunities during a trading day and trends are developing more frequent than on other, more exotic pairs. The strategy was developed by a guy named Zeno and it’s available on forexstrategiesresources.com. I must warn you, it’s a pretty complex strategy so put your thinking caps on.

How to use the SD Strategy?

First of all, I don’t know what “SD” stands for (Super Duper maybe?) but I don’t think it’s too important anyway. After all, what matters is how much money it makes or if it makes. Ok, enough chit-chat, let’s get to business. The strategy uses more than one indicator but the most important seems to be the HAMA indicator. Next, we have a color changing Moving Average, a default MACD with Histogram and some special candles called SD Candles. Unfortunately, I couldn’t get the special candles to work properly on my charts so I just replaced them with Heikin Ashi candles which I find better anyway. The idea behind the strategy is to squeeze in as many confirmations of a trend as possible and then capitalize on them. After you installed all the indicators in your Meta Trader 4 platform (in your experts/indicators folder), your chart will look similar to the one below:

The settings for all custom indicators are default; I did not make any adjustments because the creator of the strategy doesn’t mention any special parameters. The same applies to the MACD: use 12, 26, 9, the usual, out of the box settings. In order for us to open a trade we need all indicators to agree so for a Put, we need HAMA to be Red and below the Moving Average, MACD to be below zero and Heikin Ashi candles to be bearish. The strategy also has a filter for ranging periods and the original author warns us not to take trades even if all the conditions are met but HAMA is not below the Moving Average (this is for a Put) because that might signal a range bound market. Here’s a summary of the conditions that must be fulfilled for a trade to be taken.

Put Entry:

  1. HAMA must be Red
  2. HAMA must be below the Moving Average
  3. Moving Average must be Red
  4. Heikin Ashi candles must be bearish
  5. MACD is below zero

Call Entry:

  1. HAMA must be Blue
  2. HAMA must be above the Moving Average
  3. Moving Average must be Blue
  4. Heikin Ashi candles must be bullish
  5. MACD is above zero

Chart Time Frame: 5 minutes

Expiry time: there is no recommended expiry time for this strategy since it wasn’t developed for Binary Options, but I would use one hour. Of course, your testing will determine the right one. You are going to test it before trading real money with it, right?

Why does the SD Trading System Suck?

First of all, just like any trend following strategy, it is prone to false signals during a ranging market… but nobody claims that this strategy is the Holy Grail of Binary Options. Of course bad trades are going to happen, but given the multitude of confirmations needed before entering a trade, the winners will probably outweigh the losers. Some traders, especially the ones that are new to the business may consider this strategy too complicated because it uses so many indicators. But let me tell you this: if you can match colors, you can trade this strategy; it’s really not hard at all. Make all your indicators Blue for bullish and Red for bearish. Buy a Put when all are Red, buy a Call when all are Blue… not that hard.

Why doesn’t the SD Trading System Suck?

This system was developed for trading the Majors which are known to be trending more than exotics and to have less whipsaws or sharp reversals. But take this statement with a pinch of salt because whipsaws happen on all currency pairs and in fact, on all assets. What I like about it is the fact that it doesn’t rely on just one or two indicators and this will give more accurate signals, although those signals will come less often.

Wrapping it up – The Trend is My Friend?

A good strategy is not obtained by cramming on your charts all the indicators you can get and expecting to make money, but I believe the SD Trading System is carefully balanced to get the best results possible. From what I have seen so far, the strategy is pretty reliable as long as it is traded as it should: don’t trade early, before all conditions are met, try to use a little discretion in order to identify a ranging market and stick to Majors. Of course, good binary options risk management and discipline plays a big role in the success of this strategy, but that is valid for trading in general. Finally, thanks to Zeno for sharing this one with us and Good Luck if you need it.

How can I get signals on when to trade currency pairs on binary option?

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I will write you a simple and logical respond about using Trading Signals from any signal providers, and then you decide, will you use it and spend time on it or not… here you go:

Online signals usually provide: brokers, companies or private traders. Let’s call it – Signal Provider.

And remember, there are hundreds or thousands of such Signal Providers..

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I was following different companies signals, it was several years ago when I started Forex. I compared signals of 5-6 Signal Providers, and it was like – believe/don’t believe/ don’t know…

Signal Provider #1 – Says that need to BUY .

Which Currency Pair Should You Trade on IQ Option? How to Choose

When trading digital options on IQ Option, you can choose among different financial instruments. These include forex, commodities, stocks and cryptocurrencies. 92% of traders opt to trade forex options compared to the other markets.

The main reason is that these options have better returns that usually exceed 80%. The currency pairs on offer are numerous, giving you more alternatives to choose from. In addition, unlike cryptocurrencies, currency pairs don’t have high volatility making them easier to trade.

Compared to stocks and commodities, price fluctuations in currency airs occur more often. This makes it easier to enter several trades per day. If you’re interested in trading forex options on the IQ Option platform, this guide will show you how to choose the right currency pair.

How to choose the best currency pair to trade on IQ Option

Many of the currency pairs are affected by news releases. This means that at some point during the trading session, the currencies will experience some volatility. I would advise you to avoid trading during these times especially if you cannot handle the heat that comes with high volatility.

How to choose the best currency pair to trade on IQ Option

Steps how to avoid trading during times when news is released

The first thing to do is to identify when different markets open based on your timezone. For example, a trader in Vietnam will benefit from the open Asian and European markets during the day. The North American markets on the other hand are open when it’s night time in Vietnam.

Your next step will be to identify when news releases are common in different markets. All market news are usually released in the morning. But, consider the markets. If a news item affecting USD is released, it will be late evening in Vietnam.

If a news item affecting GBP is released, it might be afternoon in Vietnam. Using this knowledge, you will have a good idea about when it’s best to trade a particular currency pair without being affected by a news release. Using the above examples, you can trade the USD/GBP currency pairs during the morning hours.

During the evening sessions, you can trade the JPY/AUD pair to avoid any news released in North America.

You’re probably wondering whether you should trade dozens of currency pairs trying to avoid volatility caused by news releases. I’ll address this question next.

Trade just one currency pair

I know you think this would be leaving money on the table. With over 80 currency pairs on offer on IQ Option why would you want to concentrate on just 1 pair? The reasons are explained below.

Learn your currency pair inside out

In trading, knowing your market plays a huge role in your success. How much time would it take you to truly understand the over 20 currency pairs – and profitably trade them?

Choosing just one pair shortens the time between learning and trading. It also makes it easier to transition between trying out a strategy on the IQ Option practice account and implementing it profitably on the real account.

Now using the steps to avoid news releases when trading, you’ll know the exact time frames it’s safe to trade your currency pair. So you won’t be pressured to trade every single hour of the day just to make profit.

You won’t have many open trades running simultaneously

Think about this scenario. You’re trading AUD/USD, JPY/AUD, EUR/USD and AUD/EUR at the same time. Now which one will you follow more closely? You want to make profit in all trades. But what if they all lose? That’s a lot of money to lose at once.

Trading one currency pair allows you to follow the market closely. Even if a trade loses, you’ll be able to analyze the charts and discover what it is you did that led to the loss. Also, trading just one pair means you won’t need to learn how to use many strategies and indicators. It’s time saved and potentially more profit for you.

Less mental strain

Consider the scenario I shared above. Having more than 1 open trade means you are increasing pressure on your mind.

Anxiety, fear, greed and other emotions are will eventually take over especially as the trades near their expiry. It becomes harder to concentrate. Once concentration is lost, it’s very likely that your trading performance will decline leading to losses.

Trading a single currency pair reduces this mental strain. It allows you to focus on that specific trade without having to worry about how much money you could make or lose if you had several open positions.

Trade 1 currency pair only

Choosing the currency pair to trade should be a subjective decision only you can make. Following the steps I outlined above it should be easy.

Options Trading on IQ Option

IQ Option offers hundreds of options derived from different asset classes. Your main objective is to find the right financial instrument to trade from these assets.

Patience is required when trading one currency pair on IQ Option

In many instances, you won’t find many suitable trade entry points when trading currency pairs. But whenever you find one, profits are almost assured. Trading options is a waiting game.

Now, to increase your chances of making money trading currency pairs, I would suggest using strategies that work both when the markets are trending as well as ranging. This will open up more opportunities to trade profitably.

What is your favorite currency pair on IQ Option? Why did you choose it and what’s your trading strategy. Share your thoughts in the comments section below.

Good luck!

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