Best Binary Strategies for Pocket Option

The basis of profitable trading binary option of broker Pocket Option is strategies that can predict the direction of price changes and limit the risk of traders. You can use ready-made systems or create your own. With the use of strategies traders can increase their deposit up to 2 times or more. Each trading tactic is characterized by features and risks that need to be taken into account. You will find out more information in the following sections, which strategy will be more preferable for you.

Contents

Peculiarities of trading mechanisms in the Pocket Option system
Indicator strategies in binary options trading
Indicators of SMA Strategy
Alligator Strategy indicators
Trading in Pocket Option without indicators
Candlestick patterns strategy
Engulfing
Channel trading
What is a fakey pattern?
Trade news strategy
What problems can arise using the Pocket Option strategies?

In our previous articles we have already reviewed the Pocket Option binary options broker. We identified the advantages of cooperation with this company and the characteristics of its trading terminal. Today we are going to analyze what strategies are available for Pocket Option and how to use them correctly.

Peculiarities of trading mechanisms in the Pocket Option system

Despite the technological and functional differences, the trading terminals of various options brokers are similar in one thing β€” they do not have the ability to add custom indicators. In fact, the trader should operate only with what is given by the developers of the trading software. It is not always convenient and profitable to work only with available tools. However, you can, and today we will describe several profitable ways for Pocket Option users.

A strategy is a system that organizes the work of a trader. You could never make a profit without any strategy and the trade itself turns into random bets in the casino. Today we are going to talk about 3 types of strategies for Pocket Option using standard indicators and graphical tools from the broker’s terminal.

Indicator strategies in binary options trading

The Pocket Option trading terminal offers 8 types of indicators for technical analysis. Not as many as it seems, but some of them are profitable. Indicators are tools that show the market situation relying on mathematical calculations.  Due to math analysis, indicator tools are a little late in assessing the market situation. This fact should be taken into account when choosing the expiration time.

Indicators of  SMA Strategy

Simple Moving Average (SMA) is a moving average with a period calculated from the number of bars in the history. This indicator is available in the Pocket Option terminal and now we will describe how to build your trading system using it:

  1. We will need 2 moving average indicators with different periods. So, go to the section of available tools for analysis, indicate the SMA and indicate the period “4” in the settings. Choose the color of the indicator  for green or what is preferred for you.
  2. Again, select the SMA, but we prescribe the period “60” and set the color blue (you can also use any color).
  3. We set the time interval of the chart to 15 seconds, and the expiration period to 2 minutes.
  4. That’s all. The analytical tools are set. The schedule and time are set. Now let’s describe the trade.

The principle of the strategy is based on the intersections of the moving averages. The CALL option is opened when SMA 4 crosses SMA 60 from the bottom up.

Indicators of  SMA Strategy
Indicators of SMA Strategy

In turn, the “PUT” option opens when SMA 4 crosses SMA 60 from top to bottom. Everything is quite simple.

Indicators of  SMA Strategy
Indicators of SMA Strategy

We recommend you to test this strategy on a demo account. You can make your own adjustments to the settings of the moving average periods. But you can’t open trades after the intersection, in the hope of continuing the direction of movement.

Alligator Strategy indicators

The Alligator indicator is popular among many traders. Trading on its statements gives good results. The main thing is to gain experience in using it. The alligator shows the status of costs on the market β€” it determines whether the price is in a flat state or the origin of a movement in one direction or another.

Alligator Strategy indicators
Alligator Strategy indicators

You need to follow these tips to start trading:

  1. Select the Alligator indicator in the list of tools and set it according to the photo.
Alligator Strategy indicators
Alligator Strategy indicators
  1. Next, we define 2 fast lines of the indicator and set the colors yellow and green on them (you can use any). We define a slow line and set the color red on it.
  2. The indicator is set. It’s time to move directly to trading.

The algorithm for determining the markert state for the Alligator is:

  • If all three lines of the indicator are close to each other and they are often intertwined β€” this will be an indicator of the flat state. In such cases, the transaction should not be opened at all.
  • In the case of dividing the Alligator lines to the sides, with 2 fast ones crossing the slow red line from the bottom up, we open a deal to buy an option.
Alligator Strategy indicators
Alligator Strategy indicators
  • In the case of dividing the lines to the sides, with 2 fast ones from top to bottom crossing the slow red one, we open a deal to sell the option. As always, it’s simple.
Alligator Strategy indicators
Alligator Strategy indicators

The main thing is to wait for the desired signal. In this case, the expiration period should be increased to 5 minutes on the 1-minute period of the chart.

Trading in Pocket Option without indicators

Indicator-free strategies are not so less popular and effective. They are based on the concepts of market work. Prices move equally on all charts, timeframes and markets. The main thing is to understand in which situations the movement will continue, and when it will turn in the opposite direction. The main indicator will be the price itself and the candlestick patterns. Notably, indicator-free analysis will seem difficult for new traders . Therefore, at first, you can use graphical analysis for more visualization.

Candlestick patterns strategy

The essence of this strategy is to identify candle patterns on the price charts that precede the trend reversal in the opposite direction. For the best definition, it is necessary to plot the support and resistance lines on the chart.

Candlestick patterns strategy
Candlestick patterns strategy

After determining the trend direction corridor according to the lines, you need to wait for the price to come as close to the line as possible. At these moments, we expect the formation of candle patterns. From the example shown in the photo, you can see several basic models of candle analysis. All of them are formed independently of the asset, the price chart and the timeframe.

Engulfing

For this model, it is not important to form a trend and change it to the opposite one. The model also trades well in a flat movement.

Candlestick patterns strategy
Candlestick patterns strategy

We build the trade in that way:

  • We build support and resistance lines, wait for them to touch the price chart. To change the movement from support to resistance, we wait for the formation of a “Bullish Engulfing” and open a contract to buy an option with an expiration of 5 minutes on a 1-minute price chart. It’s the opposite with a “Bearish Engulfing”. It is necessary to wait for the figure to appear at the resistance line. A bearish engulfing will give a signal to sell the option. All that is necessary in trading on candle models is their clear definition on the formation of support and resistance levels. It is important to understand that the appearance of these models in the areas of non-achievement of the levels often leads to false breakouts and reversals. In this case, the touch is an important nuance.

Channel trading

This is another way to trade with binary contracts, similar to the one described above. But it should be used in the case when the candlestick patterns did not have time to form.

Channel trading
Channel trading

To build a channel on the chart, you need to select this graphical tool from the list offered by the Pocket Option terminal. Next, we build a channel based on the support and resistance levels for the current trend. 

The logic of trading is simple: 

  • Buy an option at the moment of a clear reversal immediately after the price touches the support line.
Channel trading
Channel trading
  • Sell the option after touching the resistance line and the trend movement of one bar in the direction of a reversal.
Channel trading
Channel trading

In this strategy, the main thing is to determine the correct location of the channel relative to all points on the price chart. You can trade in the price channel not only during trend movements, but also during flat periods.

What is a fakey pattern?

To understand the algorithm for applying the fakey technique, you need to know the reason for its formation. The main reason is the logic of marketmakers at the moment when the price comes to the level of support, resistance, or an important level for a certain period of time.The strategies developed on this basis for Pocket Option allow you to trade options profitably, but here it is important to”catch the moment”.

Fakey pattern
Fakey pattern

We will describe the breakdown of the resistance level in details:

  • At the moment when the price approaches the level, the mood of traders begins to change. The market is preparing for a change of movement (in the case of a trend), or for the struggle of players and the formation of a flat movement.
  • Whatever it was, closer to the price level, traders fix the price, open trades for a reversal, set pending orders for both a reversal and a continuation of the movement.
  • A significant volume begins to form in the level zone. It is an excellent push for short-term impulse movement. Impulse knocks out all pending orders, stop losses and take profits. Having knocked out the volume accumulated at the level, the trend turns in the opposite direction.
Fakey pattern
Fakey pattern

What does it have to do with stop losses, take profits and pending orders in the option market, if the option market brokers do not provide such opportunities? It’s simple. Brokers take quotes from agencies that provide such data. And all this data is generated on the Forex markets and Stock exchanges.

In order to trade options for a breakout of the level, you need:

  • Wait for the price to touch the support or resistance level.
  • In the case of a breakout, open a trade in the direction opposite to the impulse. The expiration time is selected no more than 1 minute.
  • If the trade did not make a profit due to a longer impulse, open another trade against the movement. The price will return to the starting point of the momentum. You just have to wait for it to happen.

Trade news strategy

This is another working strategy and it does not require the use of indicators or graphical tools. This strategy is based on fundamental analysis. It is a method of measuring a security’s intrinsic value by examining related economic and financial factors. All you need is an economic calendar. 

The logic of this scheme and its principles are:

  • Open the economic calendar and find all the most important events for the current day. Events on the proposed economic calendar are highlighted by the number of icons (the most important 3 icons, the less important 2 or 1 icon).
Trade news strategy
Trade news strategy
  • We select these events in a separate list according to the time of the released news (you can make a list in a notebook).
Trade news strategy
Trade news strategy
  • We open trades according to the predicted movements in accordance with the reaction to the news.

There is a graph of predicted events on the chart of the economic calendar. Trading news is based on this data and specific news events. If the new data is more negative than predicted, we expect a decline in the trend. But if they go in a positive way, we expect it to increase. The method of trading stock options is not so perfect. If a currency pair is traded, it is important to remember that a negative value according to the new data may cause the price to increase relative to another currency, and not to decrease it. For example, if negative news came out of America on the EUR/USD pair, then the dollar will rise against the euro. If news reports from the UK came out in a positive way, the dollar will also rise. Also, some events, that are numerically higher than the previous ones, are negative. For example, in case of an increase in the number of unemployed or received benefits, this news is negative if it is higher than the previous and predicted ones.

It is better to choose all pairs that are quoted against the euro and the dollar in currency assets trading.

Trade news strategy
Trade news strategy

For example, the EUR/USD pair is selected.We expect information when the news gets out of the European Union. If the data is higher than previously predicted, and they are colored green, we open a purchase deal on the chart in 1 minute with an expiration of 2 to 5 minutes.

Trade news strategy
Trade news strategy

If the data came out in the red zone,they are negative. It is worth opening a deal to lower the dollar against the euro. In any case, you need to wait for the reaction of traders to the news and only then open a deal.

What problems can arise using the Pocket Option strategies?

Frequently, the reaction to news events may be not like it was being expected. Even on the most important news traders react very sluggishly or do not react at all. For the options market this situation is again related to the Forex and Stock markets. Let’s consider the main situations and the rules for their formation:

  • There is no reaction to the new data due to the release of news that stops the movement. If negative statistics came out of Germany and positive statistics came out of America, the euro-dollar pair simply does not react to the data.
  • There is no reaction if this pair is oversold or overbought. The trend simply has nowhere to move, as traders are not interested in new prices.
  • The reaction is strong, but in the opposite direction. In this situation, the influence of market makers again plays a role. They know how traders will react, and which deal they will logically make while waiting for the statistics to come out. Therefore, the price impulse knocks out these pending orders and stop orders. After the impulse, the trend often goes in the expected direction.

All these factors must be strictly taken into account. It is better to start trading after 5 minutes after the news release. Frequently, important events are like basics for changing the trend, and you can still manage to take a few profitable trades.

Let’s look at what absolutely cannot be done:

  • open trades randomly following the crowd in case of an unpredictable market reaction;
  • open deals directly during the news release;
  • if the transaction is processed incorrectly, open a series of transactions in the same direction with an increase in funds. This is not a roulette wheel, you do not need to hope that your color will fall out according to the theory of probability.

The strategy of trading news has several main advantages. The main one is that every day you will be able to find several points for making a deal. Pocket Option has more than 20 currency pairs and there is always news for the movement of these pairs. We recommend choosing only 2 assets: EUR/USD and GBP / USD. For these pairs, the most important news comes out almost daily. It is also worth practicing trading on a demo account. This will help to identify the patterns of market reaction to news data and the time of their processing.

Final words

In conclusion, we would like to remind the traders of the Pocket Option broker a few nuances when using the strategies described above. They are the simplest and most profitable. Their development requires experience in determining trends and turning points. The data provided on price quotes is also important. Strong volatility and reaction to price and trend patterns can only be 5 days a week (on weekdays). These days the broker gives the most correct data on price movements. On weekends price changes are determined either by the broker itself (for Pocket Option, however, this is not noticed), or according to all option brokers combined. On such data, it is difficult to predict strong changes in the price movement. Also, often on weekends, the price does not react to the levels and indicators.

Trade on a demo account and gain experience. Watch the market reaction when important levels are reached. There is no need to trade blindly believing that the price SHOULD go in the right direction. Remember that the market sees the mood of the crowd and often provokes rash or deliberately calculated reactions. Pocket Option provides a few tools for technical analysis of the market. But also what is available to the trader  will help to make the work profitable, and the strategies used on the platform of the Pocket Option broker will be error-free. The main thing is patience and the desire to achieve success with constant training.

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