We’ve done a great deal of binary trading and introduced you to a few basic binary options trading strategies. Today, I am going to take things a step further by talking about the fractal guru strategy which was created by a currency analyst called Navin Prithyani. We’ll explain how the strategy works and the rest of this article will serve to provide a review of it.
This strategy works best if you are using Meta Trader 4 charts. The Meta Trader 4 platform has both Fractals and Average Directional Index (ADX) indicators built in. This is what you need to do. For the Fractals, go to Insert – Indicators – Bill Williams – Fractals. To display the ADX indicator, go to Insert – Indicators – Trend – Average Directional Movement Index.
Bullish and Bearish Fractals
The illustration above is of a bullish fractal which is identified as the middle candle having the lowest low and then on each side two higher lows. A bearish fractal is the exact opposite of this candlestick formation.
Source: Forex Strategies Revealed
What you need to do for a call entry:
In the above picture, you can see the ADX blue line increasing steadily in the bottom chart. Now the green dotted line has to be above the red one. But in this case, it is not. When it is, a bullish Fractal (any of the ones with arrow pointing downwards) should be established. It must be remembered that a long wick must be on the side of the Fractal arrow and a short one on the opposite side as is the case with all the bullish Fractals here.
Then a put entry:
Again, make sure that the ADX is rising steadily. Now the green dotted line should be below the red one and this is true for the duration of this particular stock chart. Look for the establishment of the bearish Fractal. Then the candle has to have the similar wick lengths as with the bullish Fractal with a long wick on the Fractal arrow side and a short one on the opposite side.
The problem with this strategy is that it depends on the expertise of the trader. Expert traders are able to make money fast, but newbies can have a difficult time. The ADX is probably not the best indicator of a trend; this is another one of the riding the trend to make money strategies. It’s a nice strategy to achieve that dream to make money from home since it is capable of giving high probability trades.
However, binary options traders might want to be wary of using this until they’ve done a bit of a binary trading already using some of the strategies that we spoke about earlier.
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