The Simple Balanced System For Binary Options

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!

The Simple Balanced System For Binary Options

Many binary options traders got started trading in the forex markets. They shifted to binary because the mechanics of trading were simpler, not because the analysis was any different. For that reason, the analysis is the same, it makes sense that a solid forex strategy would work just as well for binary options. This is true of the Simple Balanced System. This system was first put forward on the website ForexStrategiesRevealed.com and has passed muster. Traders from all walks of life find this strategy to be highly effective for forex and you will find it is just as effective for binary options.

What Is The Simple Balanced System

This system uses a simple, simple but highly effective, combination of indicators to determine entry and exits for forex traders. The exits are not that important to us as binary traders unless you are trading options with an Early Out feature. In fact, the exit signals may even provide additional entry points for short term entries in some cases. The system relies on 2 exponential moving averages, a 5 and 10 bar, as well as stochastic and RSI. It is important to use the exponential moving average with this system because is gives added weight to the front end of the data set and tracks asset prices more closely than a standard moving average. The stochastic and RSI both have custom settings, the only thing about this system that is not simple. I usually don’t recommend using anything but the standard settings for indicators like stochastic but for this strategy it may be necessary. Stochastic is set to (14,3,3) and RSI to (14,70,30); stochastic is set to shorter term and RSI to a longer term.

This strategy can be used in any time frame but I suggest using daily, 4 hour or hourly charts for best results. Anything shorter than that is less reliable. This is how signals develop. For a call wait for the 5 bar EMA to cross the 10 bar EMA from below. Then wait for confirmation from from stochastic and RSI. Both stochastic lines should be pointing up with %K above %D and RSI should be crossing above the mid line, bouncing up from the mid line or simply pointing up while above the mid line. For a put signal the opposite is true. The 5 bar EMA must cross below the 10 bar EMA and be confirmed by stochastic and RSI. Stochastic should be pointing down following a bearish crossover and the RSI should be falling below the mid line or moving lower while below the mid line.

Because the original strategy is meant for spot forex it has exits as well. For binary traders these are pointless but we must take expiry into consideration. The signals given by this strategy are fairly strong and the asset moves into the money within a few bars. When choosing expiry using the daily charts a 3 day to one week expiry is recommended for the strongest signals. On the 4H chart end of day, 3 day and up to one week expiry is what will work best, depending on the asset and strength of the signal. On the hourly charts end of the day and end of tomorrow are what you want to target. While I don’t recommend using this system on any shorter of time frame it can be applied there as well, just be aware of potential market moving events.

My Final Thoughts On The Simple Balanced System

This system is simple but its not a system, its a strategy. This strategy provides analysis and rules for entering trades but nothing about position size, money or risk management. That being said if you use some sound money management techniques you should be able to produce consistent positive results with this strategy. I like that it uses multiple indicators to provide signal confirmations, I also like that the combination of indicators is easy to use. What I don’t like is that, as originally written, it does not take trend or support/resistance into consideration. Applying trend analysis is a good way to weed out false, bad and weak signals. Keeping support and resistance in the equation is a good way to weed out good signals that have an unusually high probability of failure. I also don’t like that you have to change the standard settings of the indicators. To me, this is a sure path to failure but it seems to work here.

Finally, there is an indicator that I think could replace the stochastic/RSI combination used here; the stochastic RSI. The stochastic RSI is an indicator that combines stochastic and RSI into one oscillator. It is in effect a stochastic reading of an RSI and displays exactly as normal stochastic. The only problem I see with this is that you will only be able to adjust the stochastic setting, not the RSI it is based on so it may not track exactly as intended. However, based on my back testing with the Russell 1000 index and daily charts it appears to work quite well.

Full Review of Simple Balanced System for Online Trading

Lately I’ve been looking for a system easy enough for a relative novice to understand, but still with enough “safeguards” to keep you out of trouble. The answer came in the form of the “Simple Balanced System”. It uses two Exponential Moving Averages (one with a period of 5 and one with a period of 10), Relative Strength Index (RSI) with default settings of 14 and the Stochastic indicator with settings of 14, 3, 3. If you never heard about RSI or Stochastic, don’t worry because I am going to tell you a little about them before starting to explain how to use the strategy. It wouldn’t be right to trade a strategy without knowing about the indicators involved. Since the Moving Averages were already covered in a previous article, here we go with the RSI and Stochastic.

Relative Strength Index

Commonly commonly known as RSI it is an oscillator and a leading indicator. It is an oscillator because…it oscillates between 0 and 100 values. It will never go above 100 or below 0, but these levels are not as important as the 70 and 30 levels. Those levels are highly related to the fact that RSI is a leading indicator, meaning that it can signal price reversal even before it happens. To make the long story short, once the RSI moves above the 70 level, we consider the asset Overbought and a drop in price is expected. On the other hand, once the RSI goes below the 30 level, we consider the asset Oversold and a possible rise in price might occur. I am not going to go into details regarding the math formula behind the RSI because we just need to know how to use it, not the calculation behind it.

Stochastic

is also an oscillator (it moves between 0 and 100) and a leading indicator as it also signals Overbought or Oversold conditions, but there are some differences between the two indicators: the Stochastic uses the 80 and 20 levels for identifying Overbought or Oversold and it is composed of two lines, not just one like the RSI. The fact that it has two lines gives us another signal: the Stochastic Cross. This signal is used in some strategies, but it is of no use to us in the “Simple Balanced System”. Anyway, I know some of you are curious so I am going to explain it a little: a bearish cross occurs when both lines are above the 80 level and the faster line crosses the slower line downward. A bullish cross occurs when both lines are below the 20 level and the faster line crosses the slower going upwards. The Stochastic cross can also occur between the 80 and 20 levels, but that is considered a weaker signal. Now that you know a little about the two indicators, let’s move on to the actual system.

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!

How to use the Simple Balanced System

First of all, to plot the indicators on a Meta Trader 4 chart, go to Insert – Indicators – Oscillators and choose Relative Strength Index and then repeat the same procedure for Stochastic. If you are having problems with it, read my detailed article on how to use the Meta Trader 4 platform. For the two moving averages, follow the path: Insert – Indicators – Trend – Moving Average and select the exponential method. All of these are very common indicators so there’s a high chance that you will find them on other platforms, not only MT4. Ok, now we know how to display the indicators on a Meta Trader 4 platform so let’s go forth and look at the entry rules:

Bullish Trades (Buys and Calls)

For a bullish trade, we need the 5 EMA to cross the 10 EMA upwards + the RSI to be above the 50 level (this is not a default level so you will have to add it manually) + the Stochastic to be heading up but not in Overbought territory. We absolutely need all three conditions to be met at the time of entry; it will probably not happen simultaneously so wait until they are all met.

Summary and picture for a Bullish trade:

  1. EMA 5 crosses EMA 10 upwards
  2. RSI is above 50
  3. Stochastic is heading up but it is not in Overbought territory

Bearish Trades (Sells and Puts)

For a valid Bearish entry we need to reverse all three conditions: EMA 5 must cross EMA 10 downwards + the RSI must be below the 50 levels (drawn manually) + Stochastic needs to be heading down, but not in Oversold territory. Again, all three conditions must be met at the time of the entry.

Summary and picture for a Bearish trade:

  1. EMA 5 crosses EMA 10 downwards
  2. RSI is below 50
  3. Stochastic is heading down but it is not in Oversold territory

Trading FX, CFD, Crypto And BO With Simple Balanced System

The entry conditions are outlined above and basically the only difference is that for FX, CFD and Crypto, you will have to press the Buy or Sell button, while for Binary Options you will have to press Call or Put.

As for the exit conditions, these are a bit different: for FX, CFD and Crypto you will have to set some form of Stop Loss order, as well as Take Profit. Keep it simple and don’t overthink it: the Stop Loss can go behind the previous high or low (depending on the type of trade – buy or sell) and for Take Profit, use at least a 1:2 risk to reward ratio (meaning that for each 10 pips risked, you have the potential to make 20 pips). For Binary Options, use an expiry of 2 – 5 candles, depending on market conditions.

Why does the “Simple Balanced System” Suck?

As you can see from my trade examples above, once all the three conditions are met, the price quickly starts to move in my predicted direction, but keep in mind that I looked back on the charts to find those examples and in live market conditions, the situation can be quite different. This is not the Holy Grail of trading and sometimes the market can go against us much longer than we can stay solvent. Also, low volatility and ranging periods can produce false signals.

Why the “Simple Balanced System” doesn’t Suck?

Having three conditions that need to be fulfilled before placing a trade, this system keeps us out of many false moves and gives very accurate signals. The 50 levels of the RSI are often regarded as a trend confirmation and by only trading when this level is breached we are making sure we are going in the direction of the trend. As the 50 level is not a sure confirmation of a trend, we don’t trade it alone, instead, we have two other confirmations (EMA cross and Stochastic going down). I always say that we need more than one indication of price direction before placing a trade and the “Simple Balanced System” has three of them so in my opinion, it definitely doesn’t suck.

Wrapping It Up. Should You Use This System?

Never trust anyone when it comes to your hard-earned money! This being said, open up a Meta Trader 4 platform and backtest the system. Then back test it some more. When you are comfortable using it + get satisfactory results, start placing live trades but using less money than you usually do. When you see the system working and feel good about it, start using your normal trading amounts. Overall the Simple Balanced System” is a good one in my opinion and can bring profits but much discipline is needed from the trader as he/she must always wait for all the three conditions. Good luck if you need it!

Most Accurate Easy Binary options Balanced System (Trading indicator)

Binary options system Many binary alternatives buyers got began trading within the foreign exchange markets. They shifted to binary due to the fact the mechanics of trading were less complicated, no longer due to the fact the evaluation became any unique.

For this reason, the analysis is the identical; it makes experience that a stable foreign exchange method would work simply as well for binary options.

That is actual of the simple balanced machine best binary options indicator mt4.

This system was first put forward on the website.

Buyers from all walks of lifestyles find this method to be relatively powerful for forex and you may locate it’s far just as effective for binary options.

Best free binary options system alert indicator

What is the easy balanced device?

This gadget uses an easy, simple however quite powerful, aggregate of indicators to decide access and exits for foreign exchange traders.

The exits are not that vital to us as binary investors except you’re buying and selling alternatives with an early out characteristic.

In fact, the exit signals can also even offer additional access points for brief time period entries in a few instances.

The device relies on 2 exponential shifting averages, a 5 and 10 bar, in addition to stochastic and RSI.

Its miles crucial to apply the exponential shifting common with this system because it gives brought weight to the front cease of the information set and tracks asset prices more intently than a popular shifting average.

The stochastic and RSI each have custom settings, the best thing about this machine that isn’t always simple.

Binary options strategy system reviews

I commonly don’t recommend the use of something however the fashionable settings for signs like stochastic however for this method it can be important.

Stochastic is set to (14, 3, 3) and RSI to (14, 70, 30); stochastic is set to shorter time period and RSI to a long term.

Best indicator for binary options :-

  • This strategy can be utilized in any time frame but i recommend using each day, 4 hour or hourly charts for fine results.
  • Whatever shorter than that is much less reliable? This is how indicators expand.
  • Because the unique strategy is supposed for spot foreign exchange it has exits as properly. For binary investors those are needless but we need to take expiry into attention.

The signals given through this approach are fairly robust and the asset moves into the cash inside some bars. While selecting expiry the usage of the daily charts a three day to one week expiry is suggested for the most powerful indicators.

Download Binary options system free

On the 4h chart quit of day, 3 day and up to at least one week expiry is what paintings will fine, depending on the asset and strength of the sign. On the hourly charts stop of the day and quit of day after today is what you need to goal.

While i don’t propose using this machine on any shorter of time frame it could be carried out there as nicely, simply be privy to ability marketplace transferring activities.

Based on my back checking out with a thousand index and each day charts it seems to paintings quite well.

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!

Like this post? Please share to your friends:
Binary Options Trading Wiki
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: