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Displaced moving average strategy for binary options

7 November 2013 • Binary options strategies

Dear friends and readers of Binaryoptionstrategy.eu, today I’d like to talk about another strategy we are trying and which is turning out to be very profitable. It’s based on one of the most common technical analysis indicators, the displaced moving average. Let’s see what is it.

First of all let’s open a good technical analysis platform, such as Netstation by Netdania and open the graph of one asset of our choice. Let’s click on Studies (upper part of the screen) and select Displaced moving average. Let’s set the following parameters: 14 for the period and 7 for the displacement. Pay attention: 7 and not -7!

Now let’s set the time-frame, that will be 1 minute.

 Displaced moving average strategy

 

Strategy:

  1. Set the displaced moving average: 14, +7
  2. Set the time-frame: 1 minute
  3. Set on the broker the exact expiration: 5 minutes (24option, optionbit)
  4. Open the position only in the two following cases:
    1. HIGH if the green candlestick closes by cutting the displaced moving average from the bottom to the top.
    2. LOW if the red candlestick closes by cutting the displaced moving average from the top to the bottom.
  5. In case of negative investment it could be interesting to set a progression* of investments until you reach a profitable one. But if you set the progression it becomes much more risky.

* Progression, in this case, means that if the first investment of 25€ is unsuccessful, then you have to invest 50€. If also the second investment should fail because the return on the operation is about 75%, so it won’t be sufficient to double the previous invested 50€, but you will have to invest at least 130€ to obtain a net earnings total margin of about 20€. The following recommended amount to continue the progression, after a possible third consecutive unsuccessful investment, is 300€. Pay attention: even if it isn’t so easy to obtain 4 consecutive failures with this strategy, it isn’t impossible. So, when you face progressions, it’s important to know well your potentialities, in order not to be without money to invest, due to a negative series.

Personally, I’m always against progressions but if you should realize you found the winning couple (I mean ideal asset-investment’s hour), sometimes it can be a good idea to use progressions.

It’s important to point out that also this strategy hasn’t any guarantee of success. It can be highly profitable in a short time but, if recklessly used, it can even provoke the loss of great sums. So I invite you to always pay attention and try all strategies with demo accounts.

If you want to try this strategy you can take part in our discussions and even try it, modifying parameters such as time-frame and expiration, trying to find the best compromise.

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