The tunneling binary option trading strategy is based on the moving average intersection. To make an entry at the best point of time, you need to use several trading indicators.
The tunneling trading strategy gives the best results against other strategies on the market.
The reason is that these indicators together can track all price movements best of all. To use the tunneling strategy, you should set the time frame to 30 minutes (M30) or even a longer period.
The essence of this binary option trading strategy is that the five indicators merge and hence ensure high reliability of the signals to purchase a PUT or CALL option.
The following indicators are used in the tunneling trading strategy:
An exponential moving average or EMA with a periodicity of 18 (the red line in the chart);
A 25 period ЕМА ( the red line in the chart);
A 5 period weighted moving average or WMA (the blue line in the chart);
A 12 period WMA (the line in yellow);
A 21 period RSI (the white line in the chart).
Two EMAs, the periods of which are 18 and 25, make a tunnel out of two red lines. They help to catch the beginning and the end of the trend.
The 5 and 12 period WMAs indicate the time when to open trades. They are trend strength indicators as well.
How to use the tunneling trading strategy?
If the red lines constituting the tunnel intercross or go so close that the lines of the tunnel merge, it means that a new trend begins, or the current one ends. It is important to know how to choose a binary options broker to carry out the successful options only at the reliable and certified broker.
Buy a CALL option when the 12-period and 5-period WMAs cross the tunnel of the EMA red lines from the bottom upwards. When the 5-period WMA crosses the 12-period WMA, this is the best time to buy the option.
Buy a PUT option if the 5-period and 12-period WMAs cross the EMA lines from the top downwards. When the 5-period WMA crosses the 12-period WMA from the top downwards, this is the best time to buy the PUT option.
Please pay attention that in case of the PUT option, the 21-period RSI should be below 50 in the chart. If we expect the price to grow (CALL), the 21-period RSI should be above 50.
The tunneling strategy shows the best results with high volatility products (gold, oil). However, in case of a sideways or flat trend when the market activity is low, be careful with this strategy.
WARNING! The binary options risks are lower if various indicators show the same signal. Sometimes the indicators do not show the trendsimultaneously that’s why wait until the signal is shown by at least two indicators. If all the indicators signal the same, it means the reversal of the trend.
IF THE TIME FRAME IS 30 MINUTES, YOU NEED TO INVEST DURING THE PERIOD OF 1 TO 4 HOURS.
To use the tunneling strategy, you need to open a new price chart and choose the following indicators:
- • EMA — Moving Average Exponential;
- • WMA — Moving Average Weighted;
- • RSI — Relative Strength Index.
You can change the settings by clicking the gear wheel. When you get the signals you wait for, click here. Choose a time frame of at least 30 minutes or even longer because you use this periods when you make the analysis in the candlestick chart set to 30 minutes.