The MACD binary options strategy. An easy 2-step method with help of Parabolic SAR


trading strategy with MACD and Parabolic SARHello to all binary options fans! I have an interesting MACD binary options strategy for you. Having a trading strategy is crucial for your success. You will come across plenty of the strategies but are they effective? It is a good idea to know them and check how they work for you. The strategy I am going to present to you today is based on two indicators which are the MACD and the Parabolic SAR. It is considered to be one of the most powerful trend trading strategies.

Key Takeaways🔑

MACD binary options strategy, combined with Parabolic SAR, can provide powerful trend trading signals.
Custom settings for the MACD and Parabolic SAR indicators are required for this strategy.
Remember to practice on a demo account before trading with real money and manage risks effectively.

Setting up the IQ Option chart for MACD binary options strategy

Log in to your IQ Option account and choose the asset. Then, click on the indicators icon and search for the MACD (Moving Average Convergence Divergence). In order to be able to use this indicator for today's strategy, you will have to change its parameters. Set a fast period for 7, a slow period for 14 and a signal period for 5.

Then, repeat the procedure to add the Parabolic SAR to your chart. Leave its parameters as default.

custom settings for MACD binary options strategy
We use custom settings for MACD binary options strategy

Trading with the MACD binary options strategy

The MACD binary options strategy allows you to catch the trend reversal or continuation point. Knowing when it might happen will help you to decide when to enter the trade.

Use 1-minute Japanese candlestick chart. You can hold the position open for 5 minutes.

Opening a short trade with MACD and Parabolic SAR

The Parabolic SAR should be visible above the price bars. The MACD indicator should cross the middle 0 line from above. Now you can place a short order.

MACD with PSAR signal to open a short position
MACD with PSAR signal to open a short position

Opening a long trade with MACD and Parabolic SAR

To open a long position you want quite the opposite situation on the chart to happen. The Parabolic SAR should appear below the candlesticks and the MACD should cross the 0 line from below.

MACD with PSAR signal to open a long position
MACD with PSAR signal to open a long position

Which indicator works best with MACD?

Our MACD binary options strategy today uses MACD in combination with Parabolic SAR. This interesting combination works well with binary options, where your role is only to determine the direction of the price over the next 5 minutes. This double signal from the 2 indicators contributes positively to the effectiveness of the strategy.

If you do not trade binary options but want to combine MACD with some indicator in your normal trading, I recommend you attach the Bollinger Band to your chart. This will give you additional information about volatility. In this combination, the trading signals can be the colour changes of the MACD histogram if they appear when the price reaches the upper or lower Bollinger Band line.

What is the best strategy in binary option?

There is no such thing as the best strategy for binary options. In general, the performance of a strategy cannot be considered in a vacuum. A strategy is tested on a specific asset, a specific time frame and a specific time period. Then different strategies can be compared on the same data. The assessment must also have some criteria. In the case of binary options, what matters is effectiveness. Since the payout rate at IQ Option is usually 80-90%, it is worthwhile to have a strategy which is at least 60-65% efficient.

After all, the final account is all about making money. Today's MACD binary options strategy has great potential. If properly rehearsed and applied to liquid assets such as EURUSD it can make for profitable trading.

Pros and Cons of MACD Binary Options Strategy📊

  • Highly effective when combined with Parabolic SAR
  • Can be used for short-term trading (5-minute expiration)
  • Applicable to various assets
  • Requires customization of indicator settings
  • Potential for false signals if not used correctly
  • Not suitable for all trading styles or timeframes



Parameter Recommended Setting
MACD Fast Period 7
MACD Slow Period 14
MACD Signal Period 5
Parabolic SAR Default Parameters Leave as default
Japanese Candlestick Chart Timeframe 1-minute
Position Expiration Time 5 minutes

Summary

The strategy based on the MACD and the Parabolic SAR indicators brings a pretty high win rate. Apply the classical capital management method and remember to set the expiration time to 5 minutes.

expiration time
Remember to adjust the expiration time to 5 minutes

You should always be well prepared when beginning the trading session. Analyse the market, and follow the economic calendar so you know what is going on in the world and what might affect the prices. Do not forget about risk management and emotion control.

IQ Option has a free demo account. Test today's strategy there and you will see it can turn out very profitable.

Once you are ready move to the real account to earn money. Share your opinion about MACD options strategy presented today. You will find a comment section further down the site.

Wish you high payouts!

Q&A: Frequently Asked Questions about MACD Binary Options Strategy💡

  • Q: How do I know when to open a short or long trade?
  • A: For a short trade, the Parabolic SAR should be above the price bars, and the MACD should cross the middle 0 line from above. For a long trade, the Parabolic SAR should be below the price bars, and the MACD should cross the middle 0 line from below.
  • Q: Can I use this strategy with other types of trading?
  • A: Yes, you can combine the MACD with other indicators, such as the Bollinger Band, for normal trading instead of binary options.
  • Q: How effective is this strategy?
  • A: The effectiveness of a strategy varies depending on the asset, timeframe, and trader's experience. However, this MACD binary options strategy has shown great potential when used correctly.
  • Q: Is there a “best” strategy for binary options?
  • A: There is no universally “best” strategy for binary options. Different strategies work for different traders, timeframes, and assets. The key is to find a strategy that is effective for your specific situation.
  • Q: How can I practice this strategy before trading with real money?
  • A: Use a demo account, like the one offered by IQ Option, to test the strategy and refine your skills before trading with real money.

GENERAL RISK WARNING

The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.
Kindly note that this article does not provide any investment advice. The information presented regarding past events or potential future developments is solely an opinion and cannot be guaranteed as factual, including the provided examples. We caution readers accordingly.

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Bart Bregman

Author / IQ Option expert: "My name is Bart Bregman, I have 9 years of full-time professional trading experience. I've been trading with IQ Option for more than 7 years, mainly on the shorter time frames doing technical analyses, and have many experience with Binary Options, CFDs, Options, and Crypto trading. There is no such thing as a bad trade! As a digital nomad trader, I'm mostly traveling all over the world. Follow my journey on Instagram at https://www.instagram.com/bart_bregman/. "

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