Inverse Binary Options Strategy
The reverse strategy is one of the first strategies that options beginners experiment with when they start trading. In fact, most traders independently discover this strategy for themselves and this is quite logical. The important thing is that the reverse strategy is used when a trader monitors the movement of the price of an asset and tries to determine when there will be a reverse movement.
Reverse movement occurs when the price of an asset begins to move in the opposite direction. An example of starting to use a reverse strategy would be buying a PUT option while the price of the asset continues to rise, and rises to the highest point in relation to prices that were in the past (or a CALL option if we are dealing with the opposite situation).
This happens as a result of a visual comparison of the price at previous levels at different time intervals, but there are also more advanced tools that can be used to track possible reverse directions.
Oscillators for Binary Options
The chart below shows a situation where a trader has been tracking the behavior of the GBP/USD currency pair for a long time:
In binary options strategies based on these indicators, be sure to keep in mind the overbought and oversold zones, indicating the moments of entry into the market, as well as false signals.
As you can see in the image, there are several points of movement where the reverse movement begins. But this lasts a short period of time, and the price of the currency pair continues to fall. If he had tracked the direction of price movement visually, he would have already entered the CALL option purchase trade, and he would have run out of money long ago.
But instead, it uses two separate technical indicators in order to confirm the situation and get quality signals where the direction of price movement will be reversed.
The two technical indicators used here are the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD).
RSI in Reverse Strategy
RSI
is a Momentum indicator that compares the level of recent profit or loss in order to see if an asset will be oversold or overbought. As a rule, if the RSI is below 30, the asset will be oversold, and when it is above 70, it will be overbought.
Stochastic Strength Index (StochRSI) Binary Options Indicators
MACD in Reverse Strategy
The MACD uses the in-line price movement in order to calculate the difference between the asset of periods 26 and 12 using exponential moving averages.
The MACD (Moving Average Convergence/Divergence) indicator is a technical indicator developed by Gerald Appel, used in technical analysis to assess and predict price fluctuations on the stock and currency exchanges
When the MACD moves above the 26-period line, it is time to buy, if it is lower, then to sell. In the image above, you can clearly see that the price of the asset reaches its lowest point just when the RSI drops below the 30 level.
The trading signal will be confirmed shortly after the MACD crosses above the 9-period average. A trader purchases a CALL option when the RSI is confirmed by the MACD, regardless of the expiration date, such trades end with earnings.
Inverse Binary Options Strategy at Olympus Trade Broker
In order for the Reverse Strategy to bring you a guaranteed stable income, work in the terminal of a trusted broker Olympus Trade. The trading platform has the functionality necessary for comfortable trading: a personal account with analytics on your transactions, indicators (MA, Parabolic SAR, MACD, RSI, Stochastic and Bollinger bands), a choice of options and expiration (from a minute to an hour), the ability to test strategies, use market reviews and an economic calendar.
Read up-to-date reviews about the broker Olympus Trade, as well as ask questions to professional traders here. You can see what the terminal workspace looks like in the image below.
A detailed review of the Olymp Trade broker is here.
Go to the official website of the broker Olymp Trade here.
In order to buy a
CALL
option in the Olymp Trade trading terminal, follow these steps by going to the olymptrade.com website and preparing an option by specifying:
- Type of asset
- Expiration
- The size of the bet
- Forecast of quote movement: UP
- Click the “buy” button and follow the results.
In order to buy a
PCI
option in the Olymp Trade trading terminal, follow these steps by going to the olymptrade.com website and preparing an option, indicating:
- Type of asset
- Expiration
- The size of the bet
- Forecast of quote movement: DOWN
- Click the “buy” button and follow the results.
Ask a question about Olympus Trade
Bonuses of the broker Olymp Trade
Working with Olymp Trade is especially profitable, the broker offers its users constant promotions and bonuses. Thanks to the prize funds, the trader can trade even more on the site without risking his cash capital. Now the broker is especially popular with the starting bonus, which doubles the deposit, which is offered to all newcomers to the platform who have replenished their account within an hour after registration.
Tagged with: Binary Options Strategy
