Although ‘RSI, CCI and MACD’ Binary Options Trading Strategy has three technical indicators at the same time, its conditions are clear and understandable. When all tools are positive it’s time to start buying call options, while the period of negative rates points to put-options cycle. MACD and RSI are used together in many variations, and one of the most popular ones suggests double divergence to be found before entering the market. That’s a reversal technique and it happens very rarely. Moreover, a strong trend could ignore the divergence, charting further continuation in the same direction. What happens to traders’ positions in that case? Right, they will stand against the market which is risky and dangerous.
This trading strategy follows a trend. And it aimed to indicate a period when sustainable one-way price action is forming, signalling an acceleration of one-way movement. The condition to start a cycle of buying call options says that MACD has to be above zero level, RSI has to stay above 50%, while CCI - the main technical indicator in this strategy - has to cross zero line from downside up. Once that was noticed on the chart - it’s time to pull the trigger. For the put-options cycle, the opposite situation is applicable: MACD is negative, RSI is below 50%, while CCI crosses zero from upside down.
Any financial instrument can be chosen, traders should not restrict themselves with currency pairs only. As long as the Commodity Channel Index was designed for futures contracts and other derivatives, it can be implemented for shares and commodities as well. Regarding the timeframe, the 30-minutes chart is the best one here. Shorter timeframes give too many false signals, while longer charts are vulnerable to changing market conditions. The expiration time is one candlestick.
Last but not least, when should traders stop the trading session? The answer is also very simple. The main technical indicator here is CCI and when it shows an opposite signal, it’s time to close the trading terminal with a fixed profit on the trading account or switch to a different asset seeking another entry point. So, if you were buying call options, you should watch the moment when CCI crosses the zero line back down. For put options - the upside cross is the signal to exit.