First of all, traders should clarify their targets and goals, answering a number of questions. How much time can you allow to spend in front of the trading terminal in order to analyse market conditions before pulling the trigger? What efficiency are you interested in? Would you seek reversal points to enter the market or would you follow the current trend? With how many technical indicators can you operate at the same time? Do you like wild and volatile price action or is a quiet slow-moving period more suitable?
‘Without Volatility’ Binary Options Trading System has several advantages, even though it has a couple of restrictions and it’s not suitable for everyone. First, the system is extremely effective, although signals are comparatively rare. Second, the trading method is based on the reversal trading approach, meaning that when the price goes down, we buy call options, and when the prices are climbing up, we buy put options. So, if you’re not intended to go against the recent price action, then this trading system is not for you. Third, ‘Without Volatility’ means slow price action and it’s not suitable for traders who like wild trading with multiple whipsaws, breakouts and candlestick tails. Fourth, the strategy suggests an understanding of an important but rare period of congestion, which means a certain experience of identifying the market conditions. Fifth, it’s simple as it uses one technical indicator only.
‘Without Volatility’ Binary Options Trading System works well for any asset on any timeframe longer than a 15-minutes chart. Although it’s been initially designed for trading on shares, as the congestion term comes from that kind of financial instruments, it’s also suitable for trading on currency pairs and CFDs for commodities. Even the newest asset class -- cryptocurrencies -- is also vulnerable to the technical analysis, therefore ‘Without Volatility’ is also applicable. The single technical indicator is the ADX (Average Directional Index) with default settings. The only thing to change in parameters is the threshold line which has to be moved to 25 from 20.
Enter conditions are simple. We need to find a period when the main ADX line (black is under the threshold and it’s sliding down during three consecutive bars. Once the moment is found, the price itself should be monitored for three consecutive up close to start buying put options. When the price charts three consecutive down closes, we buy call options. As simple as that. When should we stop the cycle? Once three candlesticks closed after the entry point. So, the expiration time of options can easily be calculated depending on the timeframe chosen for analysis.
The chart below shows ‘Without Volatility’ Binary Options Trading System in action with GBP/USD currency pair on a one-hour timeframe.