Multiple time frames strategy is the best what can be made for profitable trading binary options. The most valuable thing about this strategy is that it uses three indicators on different time frames. Reason of gainful trading is that binary options are all about the duration of each trade. This strategy is not a new concept, because it’s widely used in the spot forex market. But the binary trading is new industry in the market so that it explained the new wave of this strategy.
You are wrong if you think that this strategy isn`t suitable for the binary market. You are right that binary options are instruments with short expiry period. However, this statement is misleading you, because this is a perfect method of detecting the ideal entry point for providing traders to double their investments.
The strategy involves monitoring the movement of the price of the underlying asset over several time frames. In order to get a clear picture of the market it is enough to use three different time frames. If you use fewer time frames – it will give you an inaccurate and incomplete analysis. At the same time, using more time frames can be confusing you because of the overabundance of data analysis. You have to pay attention to the “rule of four” before start using the Multiple time frames strategy.
The Rule of Four in Multiple time frames strategy
The Rule of Four uses the medium time frame for the calculation short and long term frames. Let’s consider an example: we decided our medium time frame is 4 hours (240 minutes). So your short term should be 4 times less, and the long term – 4 times greater than the medium time frame. What we got:
Short term: 1 hour (60 minutes)
Medium term: 4 hours (240 minutes)
Long term: 16 hours (960 minutes)
This rule helps trader make a current decision in a wide range of time frames.
What the Multiple time frames strategy gives you?
Applying this strategy is an ideal way to start analysis with the long term time frame and then go to the medium term time frame and finally down to the short term time frame. What will you see? Analysis of the long term time frames gives you a wide range of facts about which direction your trade should be heading at. The analysis on the medium time frame allows you to see the spikes in prices that are occurring within the primary trend. Precisely medium term time frame helps trader to get a sense about the short and long term trends.
In conclusion you must to know that this strategy allows the trader to see the smaller price movements. That is why it will help you to understand market trends and to find out the perfect point to enter. We are hope that Multiple time frames strategy help you.