17:10 GMT+3 / 06.06.2023

The "Trend levels" trading strategy

Cyclical regularities of building quotes on trading charts of underlying assets are an excellent tool to generate predictions with a high likelihood of profits on the binary market. Today, we will look at a technical analysis approach based on market response to trend levels. The "trend levels" trading strategy is the most efficient way to trade binary options in the financial market. The use of this mode of forecast formation will provide for stable profitability dynamics.

In financial trading, there are two main types of trend levels that steadily build quotes on the charts.

Resistance is the level of asset prices from which the quotes make several downward rebounds during the building of a trend.

Binomo Platform

Support is the level of underlying asset value from which the quotes make several upward rebounds.

Binomo Platform

For these practical examples of determining trend levels, we used medium-term price levels for options trading with expiry intervals of over an hour. But the market is so elastic that it can build short-term trend levels as well, which can be effectively used for highly active trading of short-term options. This type of trend level may have different inclinations and building timeframes:

Binomo Platform

Practical examples of trading on trend levels

So, we have learned to determine the levels of market fluctuations and can start building profitable forecasts for binary options. There are two types of trading signals for trading on the binary market that are the most efficient - a rebound from the level and a breakdown of the level. With a rebound from the resistance level, we register contracts in the direction of the rebound (the direction of the main trend); with a breakdown of the resistance, it is necessary to register contracts in the direction of the breakdown (the opposite direction of trend movement):

Binomo Platform

To trade on the support trend, apply the following rules for registration of contracts:

For a rebound from the support level, we register contracts in the direction of quote trend movement; for a breakdown of the trend support level, we open contracts in the direction of the breakdown:

Binomo Platform

It is worth noting that high-frequency trading on trend levels will only be highly effective on platforms with defined trading parameters, as well as a set of effective chart and automated analysis tools. The main indicators of effective terminal operation for this type of trading strategy should include the following:

  • A history of the quotes on the asset chart over a long period of time
  • Exact quotes
  • A large selection of assets to trade
  • Options with short-term expiration periods
  • A set of chart tools for building trend levels
  • An increased level of transaction payouts
  • High-speed processing of contracts

An example of such an effective and efficient trading platform is the Binomo broker’s platform, which complies fully with these trading parameters. In addition, the broker offers the lowest trading conditions - an account from 10 dollars, the cost of options from 1 dollar, as well as an extensive list of analytical information and professional client trading support.

Binomo Platform

For the "Trend levels" trading strategy, the optimal period of expiration for contracts is considered to be in the range of 60-300 seconds.

At the same time, we carefully calculate the level of trading risk so that a series of unprofitable trends does not cause damage to our account. The best way to trade is to use minimum value transactions. The maximum risk level can be set at 3% of the amount of operating funds in the account.

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