The MACD Strategy

Posted by OliverPearson 0

MACD

The MACD strategy is based on a MACD indicator giving strong signals of a new trend. Traders use MACD both as a trend indicator and oscillator, therefore the strategy can be also called as “two-in-one”. MACD (Moving Average Convergence Divergence) backs on the moving average convergence and divergence principle.  This strategy gives really good results in these cases as trading many different underlying securities enable you to increase your profit.

How to Use the MACD Indicator STRATEGY

The indicator shows two moving averages. One of them is a short-term (fast) average; another is a long-term (slow) average. These averages below the chart look like a histogram (the MACD fast and slow lines).

E.g.: The M1 chart for the USD/CAD currency pair:

MACD strategy
 

The indicator shows that the fast line moves fast, and the slow line moves slow, respectively. If a new trend emerges, the fast moving average and the slow moving average converges until they cross at the point of the indicator’s zero axis.

The crossover means that the trend changes its direction.

If the histogram crosses down through the zero line, a downtrend emerges, and you need to buy a PUT option (You expect the price to fall).If the histogram crosses up through the zero line, an uptrend emerges, and you need to but a CALL option (UP).

The histogram lines form highs and lows. If the histogram is close to a high, you can expect the trend to slow and reverse. Therefore, if you observe it on the chart, don’t buy a binary option, and wait until a new trend is completed.

To make a profit on binary options is not difficult. If you can’t understand how binary options trading works, learn how brokers make money, and you’ll get the answer to your question.

Try this easy-to-use strategy right now. To do this, browse the price chart, enable the MACD indicator, compare the chart with this one, and invest in binary options. 

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