Tunnel trading binary
There are many excellent trading strategies which are adopted by experienced and advanced binary options traders, and for those who are looking to obtain higher returns, the tunnel trading strategy is very popular.
This type of trade is referred to as a tunnel trade as the specified price range looks like a tunnel. Tunnel trading is most suitable in a market that is currently in a period of consolidation. Usually, at these times, prices trend sideways, and this is especially true if the market is waiting on the release of a major piece of financial or economic news.
In this scenario, the financial markets are unsure in which direction asset prices are going to move, and therefore both buying pressure and selling pressure will counteract each other, keeping the market in its equilibrious state. Therefore, prices will continue to move in a sideways motion rather than going down or upward.
The tunnel trading strategy requires several separate instruments in order for a trader to identify and determine selling and buying signals. To do this, two exponential moving averages EMAs that have a time frequency of 28 and 18, together with two WMAs that have a frequency of 5 and 12 and an RSI indicator that has a time frequency of The tunnel is formed by the two EMAs and this enables the trader to identify the end and the beginning of the existing trend. Once this has been identified, the trader next uses the weighted averages to find the point at which they should execute their trade and also the direction in which the asset is likely to trend.
There is a rule to bear in mind here — a trader should only execute a binary option trade at the point where the red lines of the EMAs cross and run as close as possible to each other.
A call option should be placed when the 12 and 5 WMAs cross the tunnel that has been formed by the red lines of the EMA at the very moment at which they cross.
Tunnel Trader: Tunnel Trading — John Piper: Official Trading Site
Put options should be executed at the very point where the WMAs trend in the opposite direction, crossing the EMA channel that is indicated by red lines. The indicator of where to execute the trade is at the moment when the WMA with the frequency of 5 crosses the WMA that has the time frequency of 12 to the bottom from the top.
It is also important to pay attention to the RSI that has the frequency of 21, as this indicates whether an option should be bought or sold. Selling is favoured when the RSI is under 50, but if it is 50 or over, buying is the best choice. ExpertOption Review Editor's Choice. BinaryRobot Review Editor's Choice. BDSwiss Review Editor's Choice.
Tunneling binary option trading strategy
Your capital is at risk. Trade with caution, these products might not be suitable for everyone so make sure you understand the risks involved. Best Brokers Binary Bonus Trading Guide Glossary Auto Trading Options Types Mobile Signals Platforms Academy Forex Trading Forex Brokers. Tunnel Trading Strategy In Binary Options.
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How to Use a Tunnel Trading Strategy The tunnel trading strategy requires several separate instruments in order for a trader to identify and determine selling and buying signals.
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