A simple to understand 'contrarian' strategy for binary options trading is using Parabolic SAR and ADX indicators. This is a trend trading strategy for currencies, which uses 5 minute technical charts for analysis and 15-60 minutes expiry times.
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Contrarian strategy is a simple trading strategy for binary options trading with currencies (forex). Strategy is useful in trending markets, especially in the periods of longer trends.
5 minute charts are used for technical analysis and trade entries in the direction of the developed trend are made after the pullbacks against the trend. Two indicators (Parabolic SAR and DX) are used to provide the trade signals. Expiry times can be from 15 minutes up to full hour, depending on the speed of market.
Strategy results depend much on market conditions, however up to 15 trades per day can be made with a single currency, achieving avg. 60-70% win rate if applied in trending market.
Strategy is quite flexible and a trader can enter the trades only on the signals provided immediately after the trend direction change, or can enter successive trades in longer trends. The first option will enable lesser number of trades with expected higher WIN/LOSS ratio whereas the second option will enable making a higher number of trades. Each following trade in the developed trend will hold more risk of reversal forming into trend direction change, resulting in potentially unsuccessful trade.