In my previous article, I covered the basics and the tools required to successfully trade High/Low binary options.
If you have missed reading the first part of this article, then please click here to gain context and background to this binary options trading strategy. In this second part of my strategy, I will show you some easy steps to help you make your trading decisions.
However, an important aspect that I should mention is the trading mindset. I always insist that trading, irrespective of whether it is binary options or forex, is mostly 80% analysis and 20% execution. In my personal trading experience, I noticed that most of my losing trades are those that are based on impulse rather than studying the charts.
In my silver binary options trading strategy, you will have to spend most of the time studying the charts. Placing your trade is just the last bit of puzzle.
So I assume that you have a demo or a live MT4 trading account and all the indicators mentioned in the first part of this strategy is already installed. If you haven’t then open a demo account with HotForex as it offers you unlimited demo period. You can also read my article about the best forex demo account brokers.
Spot Silver Binary Options Strategy – Trade Set up
Our trade set ups happens at times when there is not much of market news happening. This includes economic news releases or commentaries that could potentially affect the price of the USD, or its peer’s, namely the EUR, NZD, AUD.
As mentioned in the first part of this article, you can choose to trade either during the Asian trading session or during late US trading session. In fact you could ‘also’ trade during London session, but with Spot Silver, price movements is quite choppy and therefore risky to trade. Trading during overlap of Asian-London Session or London – US Session should be done only when you are confident. Silver prices are quite volatile and potentially set you up to lose your investment.
Also, trade only on Tuesdays through Thursdays. Monday’s and Friday’s are usually periods of price consolidation and the lesser noise we have the better for our trades.
MT4 Chart Set Ups
Installing the 3 MT4 indicators is very simple. Close your MT4 platform if it is already running and just copy all three of those files into C:\Program Files\Metatrader-Folder\experts\indicators
Re-start your MT4 and then click on ‘Custom Indicators‘ then ‘Right Click‘ on each of the three indicators and add them to chart. You do not need to modify any settings in the indicators.
Go to 24Option.com and have your trade page ready. Click on Trader>High/Low>Commodities to see a list of various commodity instruments available for trading. Select silver and place your trade.
How to trade Silver High/Low Binary Options
Now that we have our charts ready and the 24Option.com ‘Trade’ Page ready, the first step is to look at the 15 minute chart to see how/where the price is. The moving averages (Sidu’s Moving Average Indicator and Exponential ‘xPMA’ Moving average) will be our first set of indicators to look at. If both the arrows point downwards, it infers that the price is falling.
- Switch to the 15 minute chart and look for xPma and Sidu’s indicator arrows (Downward facing arrow infers a falling price and upward facing arrow infers a rising price)
- Go to the trade area at 24Option.com and look at the contract close times. Select the first expiring contract to have your trade set up ready.
- Go back to the MT4 chart and switch to the 1 minute chart and look at the indicators. The 1M chart is the early indicator on price movement. Look how wide or narrow the moving averages open up. Switch to 5M chart to continue monitoring the moving averages.
Signal for placing HIGH Option
- On the 5M Chart, the MA’s slope upwards and on 1M chart, the MA’s are wide
- Price will close higher than the current market price in the next 2 – 3 minutes
Safe/Conservative Entry: If price is trading close to daily support lines on the pivot chart, then trade a ‘High’ Option.
Signal for placing LOW option
The opposite conditions for ‘High’ option hold true.
Safe/Conservative Entry: If price is trading close to daily resistance lines on the pivot chart, then trade a ‘Low’ Option.
Look at the chart below to see the latest trade. An investment amount of $50 which gave back a return of $86.50
Key points to note while trading Silver High/Low Binary options
- It is best to trade right after a quarter. Ex: 11:15/11:30/11:45 and so on. This is because the moving averages change and it gives us a better insight into price movements.
- Always trade low. Trade with an investment of $24. In case you take a loss, then step away from your computer and do not trade for the day. Impulsive trades will only make you lose more money.
- If you are just starting out, then be conservative and once you get a feel of the trading system, proceed with higher investments.