Full Review of the Genesis Binary Options Trading Strategy
I am always looking for a new strategy, one that works better than the previous, one that could make me more money, with less stress. But often I wonder: if I would find a near flawless strategy, would I stop and just trade it or would I try to find another one… one that could make me even more money, with even less stress. The normal, healthy thing would be to stop searching and start making money, so here’s one for those who haven’t found what they’re looking for. Maybe the Genesis is what you’re looking for, maybe it’s not, but it’s sure worth a look.
What is the Genesis and how to use it for Binary Options
The core indicator of this strategy is the Genesis Matrix indicator. By now this is widely known among Forex traders and to get it you will have to visit Forex Factory and the original thread where the indicator was publicly shared. I’m not doing this because I am too lazy to attach it here, just because I want to give props to the guys who built it. So go visit their thread. Ok, now let’s talk about the indicator a bit: it is actually composed of 4 indicators (TVI, Gann, CCI and T3). I am not going to talk about each one of them because that would take hours of reading probably and the idea of the Genesis indicator is to make things simpler, not to complicate them. So take a look at this picture:
The Genesis matrix combines all 4 indicators I talked above and displays them in one window, making it easy for any trader to use them. W-hen the Genesis is all Red means that all 4 indicators are pointing down and the opposite is true for all Blue. Ok, enough about the Genesis; for now you need to know that we will only trade when all four squares are the same color.
Our next indicator is the XPMA and will be used to indicate trend direction. You might be familiar with this indicator from the Getsuga Tensho strategy, but if you’re not, don’t worry because it’s extremely simple: when the XPMA is Blue, the trend is Up and when the XPMA is Red, the trend is Down (the setting is 50). Now you can probably see how the strategy is coming together: when XPMA and Genesis are full Blue, you go for a Call and when they are all Red you go for a Put. Yep, that’s about it, except we will use one more indicator: a slow Stochastic with settings 20, 5, 5 and we will get this setup:
The purpose of the Stochastic is to keep us out of trades where the move is exhausted so we will not place Puts if the Stochastic is Oversold (below the 30 level) and we will not place Calls if Stochastic is Overbought (above the 70 level). You also need the Stochastic to be crossed in your direction. Here’s the summary of the rules:
- XPMA 50 Blue
- Genesis full Blue (all 4 dots/squares)
- Stochastic is crossed upwards but it is NOT overbought (above 70)
- XPMA 50 Red
- Genesis full Red (all 4 dots/squares)
- Stochastic is crossed downwards but it is NOT oversold (below 30)
Chart timeframe: 5 minutes. I do not know how it performs on other time frames and any feedback would be appreciated.
Expiry time: Discretionary, according to market conditions.
Why does the Genesis Strategy Suck?
If you thought you just found the Holy Grail, you were wrong. The strategy fails, just like any other strategy if you trade it simply based on the colors of the indicators. Look at the picture again and notice the fourth trade which is a loser (unless you got very lucky with your expiry time). All the conditions are met but a guy who simply trades the colors of the indicators would lose that trade. A guy who has a medium level of trading education will know to stay away from that trade because it’s the fourth signal in the same trend (or mini-trend or whatever you wanna call it) and usually this type of signals are riskier than the ones taken at the beginning of a trend.
Why the Genesis Strategy doesn’t Suck?
The Genesis, which is core indicator of the strategy, is also the main reason why this strategy can give good results. We are not trading based on one indicator and instead we combine 4 of them to get a super indicator… kind of like Captain Planet. In fact I think he needed 5 rings, not 4 indicators. Well, whatever, but I think that more confirmation will increase the probability of success as long as it is delivered in the form of a clean indicator like the Genesis.
Wrapping it up
Basically this is a trend following strategy which is simple enough for anyone to use. Of course you need some knowledge about the markets to make it work better, but if you are totally new to trading, it’s pretty easy to just pick up and use it simply by matching colors and a Stochastic cross. Kudos to the guy who created the Genesis and good luck to those who need it.