30 Minute Expiry
Popular amongst scalper and swing traders, a 30 Minute strategy allows binary options traders the opportunity to place a high probability trade approximately two-to-four time per day. Primarily used for trading currency pairs which oscillate within a tight trading range, the 30 Minute strategy is considered ideal for traders of all levels of experience.
To successfully identify a high probability trade setup, the first point of action for a 30 Minute binary options trader is to confirm the trend. That is, the general direction of a market or of the price of an asset; either upward, downward or sideways.
Used to help cut down the amount of “noise” on a price chart and as a general rule, if price is above the Moving Average line the trend is up. If the price is below the Moving Average line the trend is down. When price crosses over the Moving Average line, a trend reversal is anticipated.
A bullish crossover occurs when price crosses above a Moving Average from below. The crossover signifies that a correction on the downtrend is over and an uptrend is possibly commencing.
Conversely, a bearish crossover occurs when price crosses below a Moving Average from above and signals a potential change in uptrend direction and the imminent commencement of a downtrend.
Typically, a 30 Minute binary options trader will use a 200-day long-term Moving Average for trend identification, and a short-term Moving Average (such as a 50-day) crossover to generate trading signals.
Confirmation Indicator: Relative Strength Index
Because binary options traders are not concerned with how much an asset moves in price, only the direction, for a Moving Average price crossover strategy to be considered high probability, a trader should employ the use of a momentum indicator for signal confirmation. (NOTE: Opposing signals may indicate that the Moving Average signal is less reliable and the trader should exercise caution when pursuing the trade).
Relative Strength Index (RSI) is a momentum oscillator which measures the speed and change of price movements by comparing the size of recent gains to recent losses over a given period in an attempt to determine overbought and oversold conditions. As an independent indicator, when the RSI approaches 70 it is considered to be overbought and signals a sell trade. Conversely, when the RSI approaches 30, it is considered to be oversold and a buy trade is generated.
Price Chart Setup
Using 1-minute price bars, a 30 Minute binary options trader will use a 200-day Moving Average to confirm the direction of the prevailing price trend with a 50-day Moving Average crossover to generate trading signals. A 14-day (default period) RSI indicator is employed for signal confirmation.
When the 50-day Moving Average crosses above the 200-day Moving Average, a Call trade is generated. For the trade to be confirmed, the RSI must be above 50 signalling an upward trend which is (even) strengthened further if price action is above the Moving Average.
When the 50-day Moving Average crosses below the 200-day Moving Average, a Put trade is generated. For trade confirmation, the RSI must be below 50 signalling a downward trend which is (even) strengthened further if price action is below the Moving Average.
Responsible money management ensures that the losses don’t mitigate the profits.