Many professional day traders have long recognized the potential of certain trading hours within a day. Day traders mainly need volatility, which can be very high at certain times of the day. But it is not only volatility that counts, but also the persistence of trends. There are many studies on this subject, because it is precisely this data that can be summarized very statistically. The following strategies are based on trends that are highly likely to occur at the given time.
Use market opening strategies: How to trade binary options
In this article you will learn everything you need to know about market opening strategies. However, in order to increase your chances of success, it is essential that you carefully consider binary options in advance to find out what really matters, what you should consider and how to trade binary options at all. For this reason, we have summarized the most important information in the following slideshow:
The EU opening strategy
The EU opening strategy takes advantage of the volatility of early trading hours and the resulting daily trends in the European stock indices such as the DAX or STOXX. Since the trader wants to make sure that he does not trade any false signals, he uses certain rules that always apply:
- Trading starts at 9:30 a.m.
- Trading is only long or call
- Only trades if MACD generates a trend confirmation
- The position is only held until the end of the day
The first rule is important in the sense that the uncertainty direct opening, where volatility is extremely high, can be avoided. The second rule is to reduce the trading frequency. The third rule is the confirmation of a trend, so to speak. The MACD indicator is a trend-following indicator and is intended to serve as a signal generator. The indicator should be presented shortly.
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The MACD indicator works with three moving averages of the index -Courses, which all have changeable settings for the time base, but are usually set to 12-26-9 (days, hours, minutes). A difference is formed from the first two, which then functions as an independent moving average. The third average (9), the so-called trigger line or signal line, generates a buy or sell signal when it is crossed by the other line up or down.
The histogram shows how far the moving average has moved away from the signal line and helps to classify the signal in its relevance. If the histogram increases, the average line moves away from the signal line. The trend continues to develop. A falling histogram indicates that the signal line will soon cross and that the trend may reverse.
Traders often use the intraday rule. That means they only take positions within the day and close them at the end of the day.
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Momentum indicator as a signal filter
The MACD indicator is one in the 70s developed trend confirmation indicator. As much as it has steadily increased its level of awareness in recent decades, there is little discussion about the fact that the indicator can often generate false signals. Because it works on the basis of moving averages. Like all averaging indicators, the MACD indicator has in common the fact that it is a lagging indicator. In this sense, he cannot forecast the course of the price, he can only confirm it. This results in the problem of false signals that cannot be prevented.
Traders often use other indicators as a filter additive. One such indicator from the oscillator family is the so-called momentum indicator. The momentum measures the speed of a trend movement, so to speak. If the momentum increases, a further trend continuation can be assumed. Even more interesting, however, is the fact that the weakening momentum points to a slowdown in the trend. The momentum indicator is therefore often referred to as a leading indicator.
Let's take another look at the DAX on the hourly chart, this time with the two indicators MACD and momentum. The MACD indicator already indicates a trade opportunity. But the momentum indicator also confirms the trend by rising at the same time. In addition, the momentum indicator warns us that the trend will flatten out. If we have not yet bought an option, we can do without an unfavorable entry in this constellation.
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Strategy trading with Anyoption
anyoption is now a heavyweight in the brokerage business. You can tell that, compared to the competition, on the website. But can the strategy described above also be traded via anyoption?
First of all, we have to determine whether the broker offers the common EU stock indices as an underlying. This is the case. Anyoption can be used to trade options on the DAX, TecDAX and even the MDAX. The term can also be adjusted so that the option expires by the end of the day. Our rules can therefore be implemented well.
In addition to many services such as mobile trading or special trading (BitCoin, Alibaba) of binary options, the broker unfortunately does not offer a platform for analyzing the market technology, which we absolutely need to be able to use the respective indicators. We therefore have to switch to other software. In the meantime, many providers can be found on the Internet through which such an analysis can be carried out free of charge.
If we have carried out the analysis, we can buy our call option directly via the trading platform. If the right decision is made, anyoption grants a return of 67% on an option with a term until close of trading at 5:30 p.m. An attractive offer. However, you should always keep in mind that you lose 100% of your stake if the course does not develop as expected. The probability of making the right decision can be increased by the strategies presented above. However, it is important to pay attention to relevant events. Because these do not stop at the market technology.