The 1-2-3 Strategy Binary Options 2020

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The 1-2-3 Strategy

The 1-2-3 strategy is a simple system based on a 3 point chart pattern. When looking at a 1-2-3 downward pattern, the 1 would be at the highest and for a 1-2-3 up, 1 would be at the lowest based on the swing in the pattern. See the diagrams below for more information. Usually the 1-2-3 down trend comes up after a trend that was moving upwards. The 1-2-3 up pattern appears after a downward trend. You only enter the market when the resistance or support of point number 2 is broken. The 1-2-3 up pattern is not valid if the point number 3 is at a point lower than 1. The same with the down pattern, point 3 should not be higher than the point 1 for it to be valid. The strategy cannot be applied correctly if point 3 is at a higher level on the up cycle or lower on the down cycle. To stay safe when using this strategy you need to ensure that you stick to this specific point and not enter the market at this point. This strategy relies on reversal patterns so you need to stick to this one specific rule. This strategy is a little harder for amateurs to grasp, but once the strategy and the highs and lows are understood, the application of the 1-2-3 strategy becomes a lot simpler.

Place a CALL option on breaking the 2nd point line

This particular strategy has been around for many years and is used reliably by traders of Forex, equities and stocks alike. This is a strategy based on price action and the resistance and support principles are clearly laid out. Although this is particularly used as a reversal strategy, it can be used with tends in a normal way as well. In diagram 2, you can see the lows and highs are numbered, the new trend is downward and there have been a number of successful Put opportunities. Whenever the support at point 2 is broken, the market is entered and all trades are taken going with the trend. There is protection from bad trades by making sure that point 2 is broken on the lowest point, if not, this would be a losing trade.

Place a PUT trade on this setup

How does it work?

To use this strategy requires software that can provide accurate charting. To give an example of how this strategy can be used, we will take a down pattern to work with. The opposite would apply for an up pattern. When there has been a strong move upwards, you can start looking for the 1-2-3 pattern to start to form. Start off with the first peak which is the top of the trend if the strategy works out. Should the price continue to increase, you would need to mark the newer high point as point 1. We should see a counter move start and the lowest point of the move can be marked as number 2. If the new move shows up higher than the original point 1, then this strategy will not work for this specific trend. If the new point is not higher than the previous point 1 and the move appears to be downwards, mark the highest point of the latest move as number 2. This completes the pattern but remember to stick to the rule. The price must move low enough to break the point that was set as number 2, which was the lowest point previously. This means that we can enter a trade by choosing Put as we have met the strategy conditions. See images below for more information:

Real-chart strategy usage

Advantsges of this strategy

This particular strategy has a high success rate as it can help avoid bad trades as well as giving good indicators of potential good trades. This is not a fail-safe method as the changes in the market can sometimes be unpredictable and you can end up with some false positives, but overall, this specific strategy has a good chance of earning some good profits if applied correctly.

Full Review of 1-2-3 Strategy – Easy as A-B-C

The “1 – 2 – 3” Strategy: Easy as A – B – C, profitable as an ATM?

Here I am again folks, looking to wipe the dust away from an old, classic price action strategy and bring it to you with the good, the bad and the ways we can adapt it for Binary Options trading. The strategy is simply named “1 – 2 – 3”. Let me tell you, in the days this strategy was born, marketing and trading did not go hand in hand and not everybody tried to sell you a strategy telling you that it uses a magic formula that also helped man to reach the Moon, invent hot water or other nonsense like that, hence the minimalistic name. The 1 – 2 – 3 strategy actually consists of a simple three point chart pattern; just look at Picture 1 below (without looking at Picture 2) and you will understand it perfectly (… you looked at Picture 2 also, didn’t you?). For a 1 – 2 – 3 Down we need point “1” to be the highest swing in the pattern and for a 1 – 2 – 3 Up we need point “1” to be the lowest swing in the pattern. This strategy is mainly a reversal one and the 1 – 2 – 3 Down will appear after an uptrend or at least after a move up. Conversely, the Up pattern will appear after a downtrend or at least a move down. The market is entered once the support or resistance formed by point “2” is broken. However, we don’t have a valid 1 – 2 – 3 Up pattern if point “3” is lower than point “1” and we don’t have a valid 1 – 2 – 3 Down pattern if point “3” is higher than point “1”. In any case, if point “1” is surpassed by point “3” in the opposite direction, all bets are off and we can’t apply this strategy.

Why the “1 – 2 – 3” strategy sucks

I mentioned the words “reversal pattern” and that is where the strategy can start to suck. Everybody says “Go with the trend because it’s your friend” …and they are right, the probability of success is greater with trend entries. When trying to identify reversals, we can get burned easily if we were wrong and it turns out to be just a retracement. But we can avoid this by following the simple rule “…if point”1” is surpassed in the opposite direction, all bets are off”; this way, we don’t enter the market and keep our money safely in our pockets or, we can trade differently, according to the new conditions. Something that can keep a newbie away from this strategy is the fact that they can get easily confused by the 1 – 2 – 3 highs and lows, at least in the early period of using the strategy, but trust me, after a while, all the pieces of the puzzle will fall into place and things will be a lot clearer.

Why the “1 – 2 – 3” strategy doesn’t suck

This strategy withstood the test of time and it’s been used by Forex traders, stock traders and equities traders, being a pure price action strategy, with sound support and resistance principles. It is mainly referred to as a reversal strategy, but it can also be used in line with the trend. Ok, now look at Picture 2 and notice how the highs and lows are numbered in the newly formed downtrend and how many Put opportunities we had, all successful. In Picture 2 we enter the market each time the support formed at point “2” is broken. Most important, all the trades were taken with the trend. Also, we are protected by a bad trade: in Picture 2, our trigger to enter the market again would be the break of the last point “2” (the lowest one), but since this doesn’t happen, we stay away of a losing trade.

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How to use the “1-2-3” Strategy

First, you need to use proper charting software and set up an almost naked chart because we are interested in price swings, not some lagging indicator. I am going to explain a 1 – 2 – 3 Down pattern, but keep in mind that all the rules also apply for an Up pattern, reversed of course. After an uptrend or at least a strong move up, we must look for the 1 – 2 – 3 pattern to form, starting of course with the first peak (1). This peak will also become the top of the trend if our strategy works out (if price continues it’s up move, we will mark the new high as point 1). Now a counter move will begin and we will mark the bottom of that move with 2. At the moment we have an uptrend and a retracement that just ended and price started to move up. If this new move up will surpass our initial point 1, all bets are off, like I said and we go drink our beverage of choice while we wait for another setup. If the new move up does not surpass point 1 and starts turning down, we will mark the highest point of this new move up with 3. Now our pattern is complete, but there is still a very important rule that we have to follow: price must move down to break the low created at point 2. If that happens, all our conditions are met, we enter the trade by selecting Put and again, we go drink our favorite beverage. The outcome of the trade is out of our hands now, but at least we know the strategy was followed as it should. If all the explanation confused you, here’s a picture to help:

Conclusion – 1-2-3 Yay!

All I can say is that the 1 – 2 – 3 strategy has a big probability of becoming our personal ATM if used correctly, as per rules described in the first paragraph and it also keeps us out of some bad trades. But sometimes the market moves so hectic that all our strategies are messed up and for some reason, they all fail. Not being the “Holy Grail”, this strategy is also prone to false signals, whipsaws and other ugly stuff that the market throws at us. Overall, it’s a good strategy in my opinion and I personally traded it many times with success, but it also gave me some headaches.

Click here for more information or ask our experts for more details on the forum.

Binary Options Trading Strategy – Best 60-Seconds Strategies

Today we are going to share our binary options trading strategy with you. This strategy is designed to help you identify whether you’ll like trading binaries and teach you how to trade binary options the right way. If you prefer to play it safe over gambling, you’ll need a strategy or tactic to help you master binary options and other trading activities. This is where our TSG team comes to the rescue. We will provide you with the best binary options strategy.

The main reason we’re interested in learning about trade binary options is the fact that binaries simplify what we’re already doing in Forex. At the same time, binary options also allow us to make more money in the process. We are also controlling the risk.

Binary options are easy to understand. This is coming from someone who has little or no experience in the area. If your favorite approach to trading forex is to jump in on a fast price movement and ride the intraday trend for as long as the momentum lasts, you can learn how to make money trading binary options very quickly.

When we first discovered binaries, the light bulb in our heads turned on. We figured out the same thing that we’ve been doing in Forex can be done. But walk away with 75%, even 95% winning trades because we only needed to get the direction right. No need to worry about how many pips we could grasp in the process.

And that, my friends, is the real beauty of binary options.

What are Binary Options?

Binary options are a form of derivatives that have a fixed profit or loss. Trading binary options is simple. All you need to do is ask yourself a simple yes or no question. Will the price of the underlying asset be worth more than the strike price at the expiration date?

Now, let’s start by understanding how binary options work.

Essentially, we can trade binary options for any type of instrument. Whether it be commodities (Gold, Oil or Silver), Forex exchange currencies (EUR/USD, GBP/USD or USD/JPY), or stocks (Amazon, Tesla or Twitter).

So, the first thing you need to decide upon is to select the asset to trade.

Second, before submitting our trades, each of these instruments has a current value at any given point in time. How to trade binary options depends on our trading skills. It is used to predict where the current value will be some time in the future. In other words, we must use our skills to predict the market direction. This will determine our success in trading binary options.

The market can only go up or down. If we believe the current value will go up in the near future, then we buy a Call option. On the other hand, if we believe the current value will go down in the near future, we buy a Put option. Read more about call options vs put options.

Third, we need to determine what the most critical aspect of trading binary options is. The expiration time will ultimately determine if you’re making a profit or not.

Trading binary options require you to correctly forecast two things:

  1. Whether the market will rise or fall.
  2. Your forecast needs to be accurate during a certain time frame – called the expiration time.

If you’re right on the market direction by the time of the expiration time, you earn a profit. Being wrong means you incur a loss. The way binary options works is that if you’re right on the market direction, you’ll get a percentage of what you initially invested in.

Typically between 75% and 95% and in some cases, even 100% of your initial investment, depending on your Binary Options Broker.

Supposing we’re wrong on the trade, then we’re going to lose the whole amount invested in the short term.

We have made a nice infographic that highlights the four steps on how to master binary options trading.

Now we’re going to focus on step two, which is how to predict the price movement. If you manage to figure this out, then knowing how to make money trading binary options will be a piece of cake for you.

Now, before we’ll outline a method on how to make money trading binary options, we always recommend taking a piece of paper and a pen and take notes on the rules of the best binary options strategy.

In this demonstration, we’re going to look at the buying Calls.

The Best Binary Options Strategy

Our team at Trading Strategy Guides is ready to share with our beloved trading community our 60-second binary options strategy. We don’t just hope this strategy will make you money, we’re certain it will. The mathematical model behind this binary options trading strategy has a proven market edge.

The only tool you need to trade binary options successfully is the RSI indicator.

Even the RSI indicator is not good enough if it doesn’t have the “right” settings. The RSI default settings need a little bit of adjustment if you want to master the 1 minute time frame. We use a 3-period RSI to trade binary options profitably.

Naturally, a lower RSI period means that the indicator will tend to be noisier than normal. But it is more responsive to the immediate price action. Along with the RSI settings adjustments, we also played around with the overbought and oversold readings. We found out that by using an 80 RSI reading for overbought and 20 RSI reading for oversold condition, we get more accurate day trading signals.

*Note: Make sure you adjust the RSI settings before you jump into the binary options trading strategy.

By changing the RSI overbought and oversold line, we have eliminated the noise. So now we’re ready to highlight our binary options step-by-step guide:

Step #1: Find an instrument that is showing a low the last 50 candlesticks. Use the 60-second chart (1 Minute TF)

The 1-minute binary options or the 60-seconds time frame is the best chart for trading binary options. In other words, the best binary options expiration time is the 60 seconds time frame.

We recommend highlighting the starting point on your charts. And the ending point of your 50-candle low that you have identified. Simply draw two vertical lines on your chart through the starting point and ending point of your 50 candle low.

When you count the 50 candle low, you should always start from the current candle. Then go from the right side of your chart to the left side of your chart. If you manage to count 50 candle low, obviously the starting candle point will be your 50 candle low.

Moving forward, it’s time to put the RSI indicator in use and spot if we have extreme oversold reading or not.

Step #2: At the moment the 50 candle low develops, we need an RSI reading of 20 or below

Since this is a reversal trading strategy we need the RSI indicator to show a bullish reversal signal. An RSI reading below 20 shows that the market is in oversold territory and it can potentially reverse.

In our example below, the 1-minute EUR/USD chart is satisfying the two conditions.

Keep in mind that in order to move to the next step, we need the 50 candle low. We also need an RSI reading below 20 to happen at the same time.

We added one more factor of confluence that needs to be satisfied. If used in conjunction with the previous two conditions, it will make you a money maker binary options trader.

Step #3: Look for a bullish divergence to develop between the RSI indicator and the price.

When trading reversals, you need to be as precise as possible. The more confluence factors you have in your favor the more accurate the reversal signal is.

What we need to see here is for the price to continue moving lower after the 50 candle low was identified. At the same time, we need the RSI indicator to move higher in the opposite direction.

If the price moves in one direction and the momentum indicator moves in the opposite direction, it means they are diverging from each other. This signals a potential reversal signal.

Now it’s time to highlight how to find the right entry point for the binary options trading strategy.

Step #4: Buy a Call Option after the first candle that closes above the high of the 50 candle low

The first thing you need to do is to mark on your chart the high of the 50 candles low with a horizontal line. The first candlestick formation that breaks above this high is your trade entry signal to buy a 60-second Call option.

It’s that simple!

After you decide the amount to invest and pick the 60-seconds as your expiration time, it’s time to sit back and wait 1 minute before hopefully collecting your profits.

Step #5: You collect your profits if the next candle closes higher than your trigger candle

If at the expiration time, the price is higher than the price you opened your Call binary options, you’re lucky because you’re about to check-in a big payout.

For example, if you’ve invested $1,000 and your binary options broker offers you an 85% payout, it means that you accurately predicted the outcome of a trade. You get back your initial investment of $1,000 plus the 85% payout which in our case is $850 in profits.

If you want to buy Put binary options, use the same binary options guide, but in reverse.

Conclusion – Binary Options Trading Strategy

Before learning how to make money trading binary options you need a great Binary Options broker. You can’t start hitting home runs right out the gate without making sure you have a binary options broker who wants you to succeed. Secondly, you need a strategy based trading technique to reveal the market direction. You only need to forecast if the price will be up or down during the next 60 seconds, making it very convenient.

We use a heuristic approach to speculate on which way the price is going to move during the next 60 seconds. At the end of the day, traders are looking for a reliable binary options system that will help them make money from trading.

The good news is that the best binary options strategy is exactly that system. Our team is built of many traders with experience in the industry, including binary options traders who know how to make winning trades. We’re ready to help you with every step of the way.

Thank you for reading!

Also, please give this strategy a 5 star if you enjoyed it!

Don’t forget to read our guide on regular options trading for beginners here.

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Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    1st Place! Best Binary Broker 2020!
    Best Choice for Beginners — Free Education + Free Demo Acc!
    Sign-up and Get Big Bonus:

  • Binomo
    Binomo

    2nd place! Good choice!

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