Scalping is a tactic that has a long history of popularity. Its application was initially associated with the stock exchange, then the Forex market was connected and after that - binary options.
It is convenient when a trader sees the result of his actions within 5 minutes. Excessive waiting is not something that many people are interested in. For example, you can open a bet with an expiration duration of 1 hour. What will happen during this time? In this case, the market is capable of repeatedly changing its direction, and this does not contribute to the trader’s peace of mind. As a result, the likelihood of rash actions increases.
In this regard, let's consider the FGM strategy, which can reduce the risks arising from scalping and lead to stable profits.
Binary options from the FGM scalping position
FGM is a variant of the strategy used in the Forex market adapted to binary options.
The proposed trading applies to currency pairs, when the expiration duration is determined by 5 minutes. For analysis, a minute chart is used, built using the MT4 platform.
Setting the FGM Strategy
If you have any trading experience, then you should understand the effectiveness of accessing the capabilities of the MT4 platform. In this case, you must follow the rule when transactions are opened directly with the broker.
The strategy in question is a set of proprietary indicators for binary options that require direct installation in MT4. There are no serious difficulties in this process. All actions boil down to the following points:
- Launch a trading platform.
- Go to the "File" menu and select "Open Data Directory".
- Find the indicators folder, which is located in the root directory, and upload the downloaded indicators to it.
- Repeat step 3, but in relation to the template, you will need the templates folder.
Attention! To distinguish a file that is defined as a template, look at its extension, which should look something like . tpl .
After installation, you will need to restart the platform. You will then need to access the additional menu to launch the FGM template.
Indicators used in the strategy
If you look at the chart, you can see that the proposed strategy is based on the following indicators:
- FGM - displayed through three lines, colored in colors such as blue, cyan and yellow. These lines are characterized from the position of moving averages MA , but at the same time, settings cannot be applied to them.
The duration of a trend is determined by the color of the line: yellow – long, blue – medium, blue – short. Market analysis relates to where the price is in relation to the lines. A trend is considered upward if the price is above the line, and downward if the price is below the line. This moment should be considered as the main signal.
- GG-TrendBar is a kind of informer that is not directly involved in generating signals, but acts as an assistant. Its main task is to display what happens to the trend when choosing higher timeframes. The formation of a red square serves as a signal of a downward trend, a yellow one – a horizontal price movement, and a green one – an uptrend. The settings of this indicator are noticeably varied, but the main point is to set the ADX period.
- ProfitableStrategy_1 – trend filtering to eliminate false signals. Includes a wide range of conventional indicators, which include, for example, various oscillators such as RSI and CCI . The appearance of green bars indicates that the market has gone up, red bars have gone down, and yellow bars have gone sideways.
What serves as a signal for binary options to enter the market
The principle of trading in this case is defined as simple. The terminal receives trading signals for binary options , which serves as an impetus for immediate action, where the first means opening a position with a broker using the trading platform provided.
Falling market signal (Put option):
- The blue line rushed down, and on its way down crossed the yellow line. This signal is also confirmed by the moment when the blue and cyan lines intersect, but under one condition: their starting position is located under the yellow line.
- ProfitableStrategy turns red.
Closing a candle involves immediately entering the trading platform and purchasing a Down option with a 5-minute expiration.
Rising market signal (Call option):
- Movement from bottom to top according to one of two options for the development of this event. The blue line intersects either the yellow or cyan line, but in relation to the second option, the condition must be met when both lines intersect at a point above the yellow line.
- ProfitableStrategy turns green.
The closing of the candle is the moment of buying the Up option, which should correspond to the expiration time of 5 minutes.
Testing a strategy for binary options in real conditions
The results of a test conducted during live trading using the FGM strategy are displayed in the image provided.
The skin shows how profitable scalping can be when the strategy in question is used. Still, 4 out of 5 trades are in the black, and this is an excellent result.
At the start, it is difficult to achieve such indicators, but as you gain practice, the necessary skill will come and the required result will be ensured. By the way, the signals listed above do not include the GG-TrendBar indicator, but it is important, since you should trade not only exclusively according to signals, but also according to the trend.
Typically, the relevant articles cover tools that work great. At the same time, not all novice traders can boast of this. An individual approach is required here so that such tools create the desired result for a specific binary options participant. You need to study them carefully and adapt them to your needs.
In this case, it is necessary to comply with money management. Capital requires competent management to ensure stable profits. The bulk of advice in this case comes down to the recommendation to bet no more than 2–7 percent of the deposit. By and large this is correct, but in relation to the FGM strategy it is better to use a static rate. To do this, you should divide the amount of capital into parts of such a size that they are the same and do not create a situation that could disrupt the psychological comfort of the trader.
The recommendations given are of a general nature. Each market participant chooses his own approach, for example, the Martingale method or some other method can be used in addition. The main thing is to work only with honest binary options brokers if you want to achieve stable results.
Download FGM strategy template
Can't figure out how this strategy or indicator works? Write about it in the comments to this article, and also subscribe to our YouTube channel WinOptionSignals , where we will definitely answer all your questions in the video.
See also:
Useful articles for trading binary options
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