Gold Bands Binary Strategy For MT4
Table Of Contents:
Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.
The Gold Bands Binary Strategy For MT4 is designed to take the trade during the specific session. Experts prefer the London and the NY or the New York session for using this edge. But these two sessions are applicable for this asset when you take trades in the Forex majors.
But when you focus on the stocks, commodities, ETFs, and indices, you have taken the trade based on market state. Gold Bands and the RSI Filter 14 period are the two indicators used for this edge. But don’t get fooled thinking the system is not powerful enough to make you rich. Gold band indicator is widely used among the institutional investor due to its high level of reliability.
It helps you to fade the market movement and pick the right direction without going through intense trouble. People with limited knowledge of price action will get the kick with the term fading and fake but it’s not complex term. We will teach you how to take advantage of the fading price.
Before you get more concerned, fading is nothing but predicting the false break and anticipation of trade with the market movement. The smart traders always take advantage of the fading condition of the market. We will depend on the gold bands and the candlestick to take advantage of the fading condition.
And in the last segment, we will tell how this system can be used to take trades in the indices. As indices trading requires adaption to the volatile market in a fast-paced manner, you must start with the currency market.
Call option setup
Executing or opening a call trade with this method is a simple task. We have already told, this system is going to explicitly use the fading of the price. The gold band indicator has three unique properties. The yellow band can provide us knowledge about support and resistance.
The mid-band provides us a trend path by altering its color and sloe. If the color of the mid-band is sapphire blue, we can expect a rise in the price and if it is red, you can expect a fall in the price. Now let’s come to the execution steps. The price or the candles will break below the yellow band support level. Minimum three candles should be formed below the yellow band to consider it as a fade out of the pattern.
Usually, the fade-out takes place when the price reaches a strong support level. The price will again enter into the yellow band and the slope of the mind band will slowly take the positive turn. Though its color red, it will become blue in a color. We need the second fade out in the price and the price will push above the yellow band. This confirms our strategy check.
Take deep breaths and wait for the price to fall the blue line or the mind band of the gold indicator. Execute the long trade when the price falls to the blue band. The expiry for the trade should be less than 60 minutes as too much exposure to the market reduces the win ratio for this system.Note that the bars in the RSI should be blue during the time when you execute the long.
Put option setup
When we expected the price to fall, we short the asset and in option term, we call it as the put option. We will describe the put option setup with some advanced terms. But to the intermediate trader, it will be the classic concept of taking the trades.
The price will break above the yellow band and form a fade out of the structure. We must have a minimum of three candles in the fade-out zone. Now let’s come to the classic concept. The consolation should be reinforced by the resistance zone or the pivot level. If not, the quality of the trade setup is not that great but still, you can make money if you consider the trend.
That means you should depend on the trend trading method. But if the trade is taken with the trend, you don’t have to depend on these extra steps of the strategy. In the second step, the price will break below the yellow band. The break of the yellow band will tell us to execute short trade. The aggressive traders can open the put option right at that moment but you should wait for the correction in the price.
In general, the price will travel back to the red line and form a strong rejection pattern. The rejection pattern will tell us we got the perfect setup to sell. But it is important to analyze the slope and color of mid-band. The slope should be pointing south and the color will be crimson red.
If there is a delay in the color change, we have to wait till we get the confirmation. In case, you take trade-in the indices, you can’t open any order without taking the confirmation. Let’s see how we can take trades at the volatile asset.
Trading the volatile asset
The system is powerful enough to take trade in any asset. But we must know about the severity of the news. If the news is very severe, it is a wise decision not to take the trade at the indices. The average movement in indices often exceeds 100 pips per minute.
So, you can imagine how the news factor can influence the volatility. Secondly, you risk exposure level should be considered with caution. If you take too much risk with this system, you are getting yourself in the life of fire. As an options trader, the trader’s usually expired in less than 60 minutes with this method. So, in such a short period, taking the high risk to gain more is nothing but an immature act.
So, try to improvise the risk factor when the trades are executed in the indices. You should be learning more about advanced risk profile management. During the leading period, it’s better to spend time in the demo environment. Risking your real money and trying to improve the skills is not going to work.
You must learn to use this edge in a secured environment where the risk will be minimal. Find a good options trader broker and test this system in their demo platform. In less one month, you will be taking trades like a pro.
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