Parallel channel strategy

Posted by OliverPearson 0

Parallel channel strategy

The Parallel Channel Strategy allows you making a good profit from trading binary options both when the trend is ascending and descending. These channels can be found virtually on any timeframe or chart. The channels can be divided into two classes:

Ascending/descending lines;

Horizontal lines formed during market consolidation.

 

To figure out parallel channels on the chart, you need to draw a line between the maximum lows and highs highlighted in rose on the chart. You get a channel inside of which the price of underlying is moving.

The lines you get are support and resistance levels. The point of the strategy is the price probably bounces off the boundary of the channel rather than breaks it when the trend is ascending/descending.

strategy
 

After you find the parallel channel, you need to wait until the price touches an upper or lower boundary. Let us assume that the price touches the upper boundary. Most probably the trend stays the same; therefore, the price will bounce off the upper boundary and go down. At this point of time you need to buy a PUT option which means you expect the price to drop.
Similarly, if the price bounces off the low boundary and moves upward, you need to buy a CALL option which means you anticipate that the price will rise.

THE BASIC RULE IS AS FOLLOWS: IN CASE OF A UPWARD TREND, YOU SHOULD BUY A CALL OPTION, IN CASE OF A DOWNWARD TREND TO BUY A PUT OPTION IS MORE RELIABLE

The reason is the same trend probably stays; the reversal or end of the trend is unlikely.

You can use the strategy on various timeframes with options like binary options 0-100 or Option + offered by AnyOption.

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