If you need a simple strategy for binary options with practical application of Price Action , where no more than one indicator is used, the Three Canadians strategy is for you. This system does not have obscure market analysis mechanisms, lagging indicators, or complex combinations of fractal analysis. In 5-10 minutes after familiarizing yourself with the basic concepts, you will be able to trade binary options - buy Call and Put contracts. This does not require technical , graphical , or even candlestick analysis skills. The strategy is really simple, clear and effective.
Why the name “Three Canadians”? Because all exchange contracts are concluded exclusively on the USD/CAD – Dollar/Canadian currency pair . What does the number “3” have to do with it? This number corresponds to the number of candles that form a price pattern (PA) and generate a signal to enter the market .
Strategy indicators for Pocket Option "Three Canadians"
Success in trading is guaranteed if the investor follows the main price trends - trends . Trends can be “ Bearish ”, where sellers win and the price (of a stock, futures, option) decreases. Also, trends can be “Bullish” - when the bulls win in the market, moving quotes up. There are a large number of ways to determine the direction of the trend on the chart; specifically, in our trading plan, this task is performed by the Moving Average (MA) .
Moving Average is the average price value over a certain period of time. The indicator smooths out short-term fluctuations and is used to highlight the main trend of a financial asset.
To add this instrument to the chart of the Pocket Option platform, select it in the list of indicators:
In this trading system, the MA selected is period 10, type – Simple Moving Average (SMA). In this case, the main indicator is not the direction vector of the line, but the deviation and return of the price from its average value, where the deviation is taken as a price impulse, and the return as a correction.
The price cannot move up or down unhindered. On its way, it encounters resistance levels that limit movements, after which a correction is observed - a market rollback. The price rollback can be called the most desirable place to open a trade along the trend. Any exchange transaction performed in the rollback area will be accompanied by minimal risk and virtually guaranteed profit.
The completion of the correction can be observed within the average price value. In the case of this trading strategy - at the level of the Moving Average with a period of 10. That is: closing a candle below/above the moving average on a bullish/bearish trend, according to the rules of this strategy, is regarded as a possible end of the correction and the first signal to open a trade.
After the rollback is completed, the confirmation factor for our goal will be the appearance of 2 consecutive candles in the same direction. For example, in a bullish trend, it is necessary to maintain a structure of 1 pullback candle downwards, and 2 candles in the same direction - up. The final element will be the position of the closing price below/above the moving average.
Entry rules
Buying a Call option (“Higher” bet):
- Make sure there is upward momentum in the market. This can be indicated by a series of 2-5 green bars above the SMA 10 moving average.
- Wait for the rollback. This could be 1 red candle with a closing price below SMA 10.
- Before betting, you need to wait for 2 green candles with a closing price above SMA 10.
- Making a Call transaction (“Higher”) after 2 candles colored green for 60 seconds.
Buying a Put option (rate Below):
- Make sure that there is downward momentum in the market, where the quotes are below the SMA 10 line.
- Wait for a rollback - 1 green candle above the SMA 10 line.
- Before betting, you need to see 2 candles with a closing price below SMA 10.
- Opening a Put transaction (“Below”) after 2 red candles.
The recommended time for purchasing binary options is from 14:00 to 00:00 Moscow time. The specified time frames are accompanied by increased volatility in the exchange market, therefore, a high probability of a directional stable trend.
Some tips to improve system efficiency:
- Remember that 100% accurate systems simply do not exist.
- Buy binary options no more than 2-5% of the deposit amount - these are the basics of money management ( money management and risk management ).
- Do not open trades 30 minutes before or after important economic news.
- Choose only a trusted broker who will definitely withdraw your earned money.
By mastering just a few techniques of technical analysis, a novice trader is sure to improve the results of his investment decisions. For example, if a trader had a comprehensive understanding of market analysis, some losing trades could be avoided, as in the example below:
Conclusion
This article discussed a simple trading system for buying binary options. The operation of one of the most popular indicators of any platform - the Moving Average - is described in detail. We also got acquainted with the price movement pattern - Price Action. Before trading on a real account, we recommend practicing your entry skills using this strategy on a demo account .
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See also:
How to trade from mobile devices on the Pocket Option platform
Pocket Option Broker Platform for Windows
How to trade express orders with the Pocket Option broker
How to participate in tournaments on the Pocket Option platform
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