› Chaikin Oscillator Binary Options Strategy

Chaikin Oscillator Binary Options Strategy

What is the Chaikin Oscillator?


The Chaikin Oscillator is a momentum indicator for the accumulation/distribution line (A/D line). Basically, it supercharges the A/D Line. The Chaikin Oscillator was developed by Mark Chaikin and it measures the momentum of the accumulation/distribution line using the same mathematical formula as the one we use for the MACD indicator.
In essence, the Chaikin Oscillator is derived from the MACD indicator, but it is also a smoother version and it gives you a more accurate view of the interaction between the supply and demand sides. The reason why the Chaikin Oscillator is suitable for binary options is because the Chaikin indicator can measure the supply-demand imbalances in the market in relation to the price.
Since this is not such a popular indicator like the MACD indicator, in figure below you can have a visual representation of how the Chaikin Oscillator looks on a price chart.
Chaikin Oscillator Binary Options Strategy


Chaikin Oscillator Binary Options Strategy Rules



The basic premise behind the Chaikin Oscillator is that a reading above the zero line is perceived as a bullish sign, while a Chaikin Oscillator reading below 0 is perceived as a bearish sign. The preferred time frame and the expiration time for trading with the Chaikin Oscillator is the 5-minute time frame.

The Chaikin Oscillator only works during the most liquid trading sessions so we only want to trade during the London and the New York session when the real volume happens. Actually the Chaikin Oscillator binary options strategy performs best if it’s traded at the London open 8:00 GMT time and at the New York open 1:00 GMT time.

The idea behind this binary option strategy is quite simple if the Chaikin Oscillator breaks from below and shows a reading above 3000 you want to Buy "Call" options. If the Chaikin Oscillator breaks from above and shows a reading below 3000 you want to Buy Puts options.

Chaikin Oscillator Example


In the example below, we have the EUR/USD at London open time, 8:00 GMT which presented a Buy "Call" options opportunity. The Chaikin Oscillator has broken above the 3000 and it’s showing an even more bullish reading above 5000 level. The Buy "Call" option expired in profit.
Chaikin OscillatorChaikin Oscillator

In the example below, we have another example, but this time during the New York open. A Buy "Put" option opportunity is presented this time as the Chaikin Oscillator is breaking below the 3000 level which is a bearish sign. Again, we can see how the momentum is in our favor and the "Put" option expired in profit.
Chaikin Oscillator Binary Options Strategy RulesChaikin Oscillator Binary Options Strategy Rules

Conclusion


The time factor is very important when using the Chaikin Oscillator because in the Forex market the real money flows into the market at the beginning of the London and the New York session. In summary, the Chaikin Oscillator binary options strategy is a great way to make a quick profit because the momentum readings off of the Chaikin Oscillator indicator are very accurate.


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