Full Review of the Trading Off the Daily Charts Strategy for Binary Options
This strategy is aptly named “Trading Off The Daily Charts” but it does not really give you an idea of what the strategy is. Yes, he is trading off the daily charts but the strategy is using Fibonacci Retracement and Stochastic crosses to give signals. This is basically a trend following strategy and one that I think is highly effective. Over and over again the author, in his post and in his comments (echoed by comments of other readers and reviewers) claims that it is a simple strategy. It is in a way, it is not complicated and it is easy to follow but it utilizes some very advanced techniques.
So What Is The Strategy?
The author, like so many other successful traders, assumes that the trend is you friend and you should follow your friend to the end. The strategy follows the primary trend and used the daily charts to generate signals. Originally intended for Forex, this strategy is well suited to binary options trading. It seeks to pinpoint entry and continuation signals on the daily charts providing reliable long term signals and also gives those signals time to unfold. Because the signals are more reliable than other strategies I have reviewed and allows enough time for trades to unfold it increases the likelihood of your trades profiting.
This Is How the Trading Off the Daily Charts Strategy Works
First, the author insists you understand the long term/primary trend of the underlying. He is focused on Forex but this strategy will work well on any underlying asset with a price chart. Once the trend is determined (in my opinion ranging assets can be used as well as long as you keep the range limits in mind when trading) the author then seeks to pinpoint continuation signals. For this he relies on Fibonacci Retracement and Stochastic crossovers for entry points. If you are unfamiliar with Fibonacci and how it is used in trading check out our review in the tools section. For those who do not use Fibonacci for market analysis trend lines, support/resistance and moving averages can also be used.
So, in an uptrend or a downtrend there are always pullbacks or bounces, respectively. When one of these occurs the author uses the retracement lines (or trend lines, ma’s etc) as potential areas for the trend to continue. The author then utilizes price patterns and stochastic crossovers to trigger his buy signals, always trading with the primary trend. Since Forex and standard options are more open ended than binary options the author also gives some advice on exits. For binary options I suggest using weekly or monthly expirations to give the trade enough time.
Why the Trading Off the Daily Charts Strategy Doesn’t Suck
This strategy doesn’t suck because it gives very reliable signals and is excellent for binary traders who don’t want to day trade. Trend following is the best way to trade and daily charts give a much clearer view of that trend than hourly, minute or tick charts. In the case of binary options this strategy also gives traders the opportunity to trade the same underlying multiple times with a reasonable assurance of profiting. This is what I mean; once you make your initial buy in and the trade starts to move in the right direction you can enter again, increasing your potential for profits.
Another reason why this strategy is awesome for binary options is the risk/reward profile. In standard options, futures or forex there is always the chance that a trade could move against you before it moves with you. This could cause your position to be stopped out or worse, a margin call. Since binary options have a simple win/lose risk/reward profile there is no worry of stopping out or margin calls, you simply have to wait for the trade to make the right move. On top of that the strategy also incorporates other well respected technical analysis tools such as Fibonacci and Stochastic.
Why the Trading Off the Daily Charts Strategy Sucks
This strategy requires patience. You will not get a signal every day or even every week. You must wait for the proper set-ups or else risk losing out. I will say that most binary options traders are short term and high frequency traders. This strategy will drastically cut down on your possible trades.
My Last Word – Geek Says Yes!
After reading this strategy I fell as thought the author has read my mind. This is the closest strategy to my own trading techniques I have seen so far. I like this strategy and will recommend it to anyone interested in trading weekly or monthly binary options. There is not much more I can say than this; I recommend this strategy to new and experienced traders alike. If you have the patience to wait for the proper set ups you will make net profits using this strategy.
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