Binario Strategy: Breakout of the Moving Average Channel
Forex trend strategies can provide huge potential profits with minimal risk.
This is very difficult to achieve when trading in a flat market or scalping , where the reward-to-risk ratio is typically one to one.
The downside of such strategies is the infrequency of signals, which are easily missed by leaving your desk for a few minutes.
The only way to resolve such situations is to abandon the use of market orders and instead build a strategy based on pending orders, which your broker will execute at any time without your intervention.
The Binario strategy is a trend-following breakout method based on moving averages, with the breakout detected and the trade opened using pre-placed pending orders in opposite directions.
Strategy Preparation. Installation
As noted, the Binario trading strategy is based on moving averages and pending buy-stop and sell-stop orders, so you can recreate the strategy on any trading platform, even mobile versions.
To do this, apply two exponential moving averages with periods of 144 to your trading chart, but plot the first one based on the highs and the second on the lows. The end result will be a channel of two parallel lines.
If you plan to use the MT4 trading terminal, we've prepared a special template for you. After downloading and installing it, all strategy components will be applied to the chart automatically.
Installation is quite simple. To do this, open the data folder via the File menu. The platform's system folders should then appear on your monitor.
Find the folder named "Template" in the list of folders and drop the template into it. Then, close the data folder. For the trading terminal to see the newly installed template, you'll need to restart it or refresh it in the navigator panel.
After restarting the terminal, open the hourly GBP/USD chart and run the "Binario" template directly on it. You'll end up with a chart like this:
Strategy Rules. Signals.
When trading this strategy, the key focus is not on which direction the moving average channel will be broken, but rather on the moment when the price is directly between the two lines. So, let's move on to the strategy signals.
Binario Strategy Signals:
1) The price has entered the channel between two moving averages or broken through one of them.
After the price enters the channel, place two pending orders: a buy stop and a sell stop, each 25 pips away from the channel boundaries.
The buy stop will be 25 pips away from the green line, and the sell stop will be 25 pips away from the red line.
The stop order for each order should be 1-2 pips away from the opposite channel boundary.
For a buy stop , the stop order should be placed near the red line, and for a sell stop pending order, the protective order should be placed near the green line.
The position is exited at a profit, which should be twice the stop order in pips. Example:
After one pending order , the other must be deleted.
Also, if the price does not break out of the channel boundaries, but the moving average channel changes (rising or falling), it is necessary to constantly adjust pending orders and keep them at a strict distance of 25 pips from the boundaries.
In conclusion, it's worth noting that the Binario strategy is a simple yet quite effective trading tactic.
Also, because the stop order is half the potential profit, even with 40 percent winning and 60 percent losing trades, you will ultimately end up with a solid profit.
Download the Binario strategy template .
