Binario strategy. Breakout of the moving average channel
Forex trend strategies can provide huge potential profits with minimal risks.
This is very difficult to achieve when trading flat or scalping , where the profit-to-risk ratio is usually one to one.
The disadvantage of such strategies is the rare occurrence of signals, which are very easy to miss after leaving the workplace for a few minutes.
The only way to solve such situations is to stop using market orders and build tactics based on pending ones, which will be executed at any time by your broker without your participation.
The Binario strategy is a trend breakout technique based on moving averages, and the breakout is fixed and a deal is opened thanks to pre-set multidirectional pending orders.
Preparation of strategy.
Installation As already noted, the Binario trading strategy is based on moving averages and pending buy stop and sell stop orders, so you can recreate the strategy in any trading platform and even in mobile versions.
In order to do this, plot two exponential moving averages with periods of 144 on your working chart, but the first one should be built based on the highs, and the second on the lows.
Ultimately, you will end up with a channel of two parallel lines. If you are going to use the MT4 trading terminal, we have prepared a special template especially for you, after downloading and installing which all components of the strategy will be plotted on the chart automatically.
Installing it is quite simple.
To do this, open the data directory through the file menu, after which the platform system folders should be displayed on your monitor screen. Among the list of folders, find a folder called Template and drop the template into it, then close the data directory.
In order for the trading terminal to see the newly installed template, it must be restarted or updated in the navigator panel. After restarting the terminal, open the hourly chart of the Pound/Dollar currency pair and run the template called “Binario” directly on it.
In the end, you will get a graph like this:
Rules for using the strategy.
Signals When trading according to the strategy, the key attention is paid not to which direction the channel from the moving averages will be broken, but precisely to the moment when the price is directly between the two lines.
So let's get straight to the strategy signals. Signals of the Binario strategy
1) The price has entered the corridor between two moving averages or broken through one of them.
After the price has entered the channel corridor, it is necessary to place two pending orders, buy stop and sell stop, at a distance of 25 points from the channel boundaries.
So, the buy stop will be at a distance of 25 points from the green line, and the sell stop will be at a distance of 25 points from the red line.
The stop order for each order should be at a distance of 1-2 points from the opposite border of the channel.
So, for a pending order, a buy stop stop order should be placed near the red line, and for a pending order, sell stop, a protective order should be placed near the green line.
Exit from the position occurs at profit, which should be twice the stop order in points. Example:
After one of the pending orders , the second one must be deleted.
Also, if the price does not go beyond the boundaries of the channel, but the moving average channel changes (rises or falls), it is necessary to constantly adjust pending orders and keep them strictly at a distance of 25 points from the boundaries.
In conclusion, it is worth noting that the Binario strategy is a simple, but at the same time quite effective trading tactic.
Also, due to the fact that the stop order is half the potential profit, even if there are 40 percent profitable and 60 percent losing trades, in the end you will end up with a good profit.
Download the Binario strategy template .