Working With Parabolic Strategies in Binary Option Trading

Working With Parabolic Strategies in Binary Option Trading

Submitted by adil on Fri, 08/22/2014 - 08:57

How Does the Parabolic Strategy Work?

The sudden rise in fame of binary option trading in just a few years and all the success everyone dreams of getting with this business sometimes leads even experienced traders to lose focus. Sticking with your trading plan and strategy is very vital to remain on-course and to keep receiving profits for a long time.

Unveiling the Parabolic strategy:

Trading strategies are the best ways to ensure you get the most out of your binary option business. Parabolic strategy is not a new one but most of the traders are unaware of it. The strategy was earlier successfully used in other financial investment ventures and it was adapted by experienced analysts for binary option trading.

The parabolic is actually a technical analysis indicator which can be efficiently used with binary options. The effectiveness can be greatly enhanced by combining it with other indicators such as SAR, MACD and 200 SMA.

The indicator can be easily used with any one to four hour price chart that clearly depicts the time frames when the price does up or down. The trader must analyze the number of intervals (which are represented by the candles) when the price action fulfills the following criteria:

• SMA price remains below 200
• Price bounces on the 13^th SMA
• Parabolic SAR remains below the price movement

The above mentioned criteria is applicable when you are trading with a UP (CALL) trade. The conditions will reverse if you want to trade the DOWN (PUT) trade.

How to use the dot lines: The dot lines created by using the Parabolic strategy can be used by the trader to generate accurate signals very easily. When the dot lines are above the asset price line, the market is experiencing rising and a bullish trend will follow shortly. On the contrary, when the dot lines are below the price action, the market price is dropping and a bearish trend will follow. These signals can be easily utilized by an average binary option trader without any confusion.

The key factor: The most important element that significantly affects the outcome of Parabolic strategy is the timing. The strategy can be used with different indicators and each indicator has a different time frame which allows the trader to find multiple good trading opportunities without changing the strategy.

A little inconvenience: The Parabolic strategy heavily relies on the SAR indicator which is usually unavailable to new traders. This highly sophisticated signal is mostly part of the PRO or PLUS membership on trading platforms which only the most established and experienced traders can afford.

A point to ponder:

Parabolic strategy is part of the technical analysis method of trading binary option trading. It will be not good if you are using classical analysis method or if you are purely gambling. There are slight or no change of success at all if your trading strategy is not up to the mark. The trading market experiences changes with time and you should also be ready to upgrade your trading strategy accordingly with the least efforts.