Trend Reversal Binary system

Trend Reversal Binary system based on multiple indicators and works on the basis of spotting short term reversal in trends (or corrections). This strategy works on 30 minute expiry and upwards. The trend reversal strategy is one of the few binary options strategies that can also be used to trade One touch options.

Who is this strategy ideal for?

Trend Reversal Binary system is fairly complex and it puts it out of the league for beginner traders. However, those with enough experience will be able to trade binary options with this trading strategy. This method is also flexible in the fact that depending on the time frame you trade (5, 15 or 30) the binary options expiry times have to be (60, 180 or 320 minute expiry times). 

Indicators

• Pivots
• SFX MCL
• RSI 14 (Read more about RSI)
• EMA 34, 11
• Stochastic oscillator (5, 3, 3)
• Trend reversal indicator
• Trend Reversal Binary system TPL file

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Signals

For Call Option

• SFX MCL gives a bullish crossover signal
• RSI crosses above both moving averages
• Stochastics oscillator is ‘NOT’ in oversold levels (above 80)
• Trend reversal indicator is ‘Aqua’

For Put Option

• SFX MCL gives a bearish crossover signal
• RSI crosses below both moving averages
• Stochastics oscillator is ‘NOT’ in overbought levels (below 20)
• Trend reversal indicator ‘Red’

Examples

Call Option

• In the 15 minute chart above, the candle marked with the Blue vertical line indicates the criteria being met
• The SFX MCL indicator shows a bullish crossover few candles ago
• RSI crosses above both the moving averages
• Stochastics is ‘Not’ in the overbought area
• Trend reversal indicator is ‘Aqua’
• A call option is purchased for a 60 minute expiry or a One-touch option is purchased for a 60 minute expiry

Put Option

• The 15 minute chart shows the marked candle with the blue vertical line meeting all the criteria
• The SFX MCL indicator gives a bearish cross over
• RSI falls below the moving averages
• Stochastics is ‘Not’ in the oversold level
• Trend reversal indicator is Red
• A put option or a one touch option to the low of the highlighted rectangle’s price level is placed with a 60 minute expiry time

Strategy Tweaks and Tricks

Due to the complexity involved and the number of indicators, we see no need for any further tweaks

Conclusion

While Trend Reversal BO strategy is unique in the fact that it can be used to trade both one touch as well as High/low binary options, the strategy requires a lot of practice even for advanced traders. It is therefore recommended to first spend time with this strategy before trading in real time.

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