Lighthouse Hidden for Binary Strategy For MT4
Table Of Contents:
- Lighthouse Hidden for Binary Strategy For MT4
- Call option setup
- Put option setup
- Managing the trades
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 Lighthouse Hidden for Binary Strategy For MT4 can be used in many forms. But we will stick to the most profitable way of this strategy. But for that, we have to use some rigid rules and it will be hard for some of the new traders. Unless you are determined to follow the rules exactly as we state, it will be tough to make changes in your life.
The system is based on embedded coding and 55 EMA. But we no longer need to worry about the setup as all the things will be done by template files. We have already declared the system will be used in a very rigid way. This allows us to take the trades only in the 15-minute chart. But we do have the indecency to choose the market. We can trade stocks, CFDs, equities, cryptocurrencies, and forms of the market by using the core concept.
The concept is clear, wait for the breakout and then take the trades at the retracement. The expiry period for this system ranges from the 60s to 5 minutes. This is the tricky part of this system as the traders often choose the wrong expiry. But we will get that covered in the trade management sections.
Remember, this system has diversified use but this guide will teach you the best method that will secure you more than an 80% win rate if the things are done in the correct order. Let’s find out more about our call option and short trade order.
Call option setup
The intermediate traders know well, breakout trading method is a bit risky approach. But we are not depending on the breakout system only. We will use the retracement phase of the market and take advantage of the short term movement in the asset. As we speak about the short term movement, you should be cautious about your step.
We can’t afford to slip any step in this method. For the call option, the first thing to notice is the break of the white and golden color moving average. Both of them have period 55 but they differ in value since the parameters are changed. After the break, expect a drop in the price when the asset price hits the major resistance.
The price will fall and touch the white moving average and start going higher. As soon as the white band is tested, give a peek at the fast 2 indicators. The green line should cross over the red line and start deviating from each other. Open your call trade and with an expiry of 5 minutes.
You may pick the 60s expiry but it depends on the market condition. Adjusting the expiry for the trade is a bit tricky as we can’t impose a certain rule. And failing to close the trade within a specific time can hamper your trade outcome.
For the trader, it is important to learn more about critical market dynamics so that they know when to close or take the trade. We will discuss this matter in the trade management segment.
Put option setup
For our put option, we need a bearish of the white and gold color moving average. The bearish break tells us the bears have started to create the pressure on the bulls and they will make a new low. Before they can make a new low, the price usually goes higher and test the band.
For the short trade, the price will test the golden moving average. At the first test of the golden moving average, signal lines in the fast2 indicator must show a bearish cross. That means the red line will fall below the green line indicating the price is ready to make the move to the nearest support.
So, opening our short trade with an expiry that ranges from the 60s to 5 minutes is a wise decision. But the traders should be cautious if the break of the correction in the price takes place with strong bullish momentum. Steady gain after the break can also be the result of the false breakout.
This means the price will again bump over the moving average causing us to lose money from the trade. No system in this world is perfect. Though retracement based entry is very accurate it can create false confidence. No matter how good you are at using this system, you must limit the risk profile and stop taking aggressive steps or increase the volume.
The maximum amount of your money can stake with this method is 1%. The reason to choose 1% is nothing but the frequency of the trade. As a trader, you will get more than 1 trades even though you might be taking the trades in the Forex majors. But if you chose trade CFDs, it’s better to stop trading for the day when you lose two trades in a row.
Managing the trades
This system gives us a powerful method to take the trade. But we must know how to manage the trades most efficiently. The first thing is the time chart. 15 minutes is our base chart and we can’t look at different charts even though it might provide decent trade setups. The second thing is the payout for the trades. If the payout is less than 75%, you are taking the trades that can cause trouble when it comes to recovery.
Payout is more like the risk to reward ratio for the options trader. The higher the payout, the lower stress you will feel while recovering the loss. At times, the false spike will hunt down your trade but it’s very normal especially during the news time. So, know about the scheduled news so that you can scale up the trade in a very proficient way.
Stop chasing the trades when you feel the market is too stable to trade. Wait for a few sessions or for a few days to get one good trade doesn't mean the system is failing to generate profit. Few good trades in a month can be enough to support your family and change your life. Remember, the system teaches us quality execution of the trade and for that reason, we must obey the rules strictly.
Download the complete system description and the files here:
Partially Automated Trading Besides Your Day Job
Alerts In Real-Time When Divergences Occur
