The Trend Momentum High/Low Strategy – Germany’s Finest?
September 11, 2013 by Bogdan G
Full Review of the Trend Momentum High/Low Strategy for Binary Options
Most of us know how good German cars are; the luxury of a Mercedes, the power of a BMW or the reliability and low price of a Volkswagen. But we don’t really know (at least I don’t) how good German Binary Options Strategies are so today I am going to review one. Fortunately the website from where I got the strategy ( forexstrategiesresources) had a translation of the entry rules so let’s see what this German strategy can do.
How to use the Trend Momentum Strategy?
First of all we will need an indicator which we talked about before and which is already built in the Meta Trader 4 platform: Momentum. We will use a setting of 18 for this indicator and a level set at 100 (double click on the indicator, select Levels and add one at 100 or manually drag a horizontal line on the indicator). The second indicator used is an Exponential Moving average with a 24 period. This one is also default for Meta Trader 4 so you should have no problems applying it to a chart. Ok, once you’ve done all that, it’s time to find out what the strategy actually tells us about the market: when a H1 candle (the strategy uses only the hourly chart) closes completely above EMA 24 or at least 80% above it and Momentum is above the 100 level, we can buy a Call with an end of day expiry. If an hourly candle closes below EMA 24 and Momentum is below the 100 level, we can buy a Put with an end of day expiry.
As you noticed, the strategy has clear rules for the time frame used and the expiration time; that’s because it was developed specifically for Binary Options so you don’t have to bother with adapting it. In fact, it’s probably better to leave it as it is and not make any major modifications. Of course, if you do and find out how to improve it, let the Forum knowJ. Ok, here’s a chart with how the strategy looks like and some nice entries:
As you can see, all trades finish In the Money so the strategy is not too shabby after all. The dotted vertical lines indicate the end of day and are just a visual aid for the purpose of this exemplification. Also, please keep in mind the fact that the chart above is “cherry picked” and your trades will not look so good each time. Let’s see a short summary of this easy strategy: