Correlation Touch/No Touch Binary Options Strategy
The Correlation Touch/No Touch binary options trading strategy is executed using the Correlation-mt4-indicator.ex4 indicator.
This indicator traces trend lines across areas of minor support and resistance, and uses directional arrows to point to where a signal can be traded.
This variation of the original strategy is used to trade the Touch/No Touch trade.
Anyone of the two components can be traded, which makes this indicator a genuine nugget of gold for binary options traders.
- MetaTrader 4 Indicators: Correlation-mt4-indicator.ex4 indicator (default setting).
- Preferred Time Frame(s): M15, M30, H1
- Recommended Trading Sessions: Any time. Depends on when the indicator signal appears on the chart.
- Assets Traded: All asset classes can be traded with this strategy.
Example of This Binary Strategy (Click the image for full size)
The Correlation-mt4-indicator.ex4 indicator will draw trend lines across areas of minor support and resistance and also trace direction arrows which can point upwards (from support) and downwards (from resistance).
The Touch/No Touch trade is based on direction AND range.
For the Touch trade, the trader should wait until the price has bounced from the support or resistance line.
If the Touch strike price is located within 15 pips (for M15 time frame) or 30 pips (for M30 and H1 time frames) along the reversal price path, select TOUCH.
For the No Touch, select this option if the strike price is located below the support or above the resistance after the price candle has either bounced on the support line or has been rejected at the resistance line.
“TOUCH” ENTRY RULES
If the trader intends to select Touch for the trade, the following is done:
- Ensure that the price given as the Touch strike price falls within 15 – 30 pips along price path shown by the arrow following price reversal from the key areas of support or resistance.
- The confirmation for this reversal is the appearance of the arrow as well as the cross of the Spearman correlation lines in either overbought or oversold zones (see chart).
- Select Touch after arrow appears if the previous two conditions are met.
Expiry for TouchTrade
The trader needs the trade open for as long as possible. So the time for expiry for the trade must span at least 4 candles.
This is equivalent to 60 minutes for a 15-minute chart setup as seen on the chart.
“NO TOUCH” ENTRY RULES
The No Touch option is selected if:
- The price reversal has occurred from the key area of support or resistance and the arrow has appeared.
- The strike price is located above the resistance line or below the support line.
Expiry for No Touch Trade
The chances of a successful outcome for the No Touch option are enhanced when the expiry times are shorter.
The essence is to ensure that there is not enough time for price to stage a huge breakout which will negate the trade outcome.
An expiry time of 10 minutes is sufficient for this trade option.
See the chart example above for an explanation of both trade scenarios.
About The Trading Indicator
The Correlation-mt4-indicator.ex4 indicator draws clear trend lines around support and resistance and so clearly define the borders which the trader should work with.
This is one of the best binary options indicators out there.