Binary Options Strategy: SMA 200 and MACD

A majority of binary options traders often look for a simple trading strategy that will allow them to start earning money as early as possible. The Moving Average Strategy (200 SMA) is an easy and reliable binary options trading strategy based on the use of a simple moving average with period of 200 as you can guess from the name. This particular moving average creates a significant level of support or resistance. Usually traders use these levels to speculate on a rebound during this moving average or its breaking. We will focus on the second option, which allows many binary options traders to make money.

These binary options trading strategy is a very simple strategy, that originally was used by forex traders, but later on was adapted to binary options. We advise traders to work on an hourly trading chart and buy binary options of type Up/Down (high/low) with an expiry equal to 2 hours. When looking at the chart, just simply search for configurations where the market has moved several days under or above the moving average with period 200 and tried to break it. In order to avoid false signals we recommend using additional technical indicator MACD (with 12,26,9 default setting).

Signal to buy a CALL option (price will be higher)

  • The market is located above the moving average with period 200 for at least a day
  • The market broke through moving average 200 when going up and now is above it
  • MACD is positive, the histogram is located above the line

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Signal to buy a PUT option (price will be lower)

  • The market is located below the moving average with period 200 for at least a day
  • The market broke through moving average 200 when going down and now is below it
  • The MACD is negative, the histogram is below the line

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As this binary options strategy usually offers 1-2 signals per trading asset weekly, we recommend traders to choose a binary options broker, which offers a variety of trading assets, such as FinMax.

After testing this binary options strategy on major forex currency pairs, our success rate was around 80% on more than a hundred operations carried out. The profitability of this trading strategy is similar to that of the binary options strategy MACD and Bollinger Band, having recently been the subject of an article on our blog.

We wish you a profitable trading and looking forward to hearing about your results.

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