The Pullback – Binary Options Strategy

Trading the Pullback can be a hard task for some traders, as they use and look at to many indicators to spot these setups. Ill explain a much more simplified binary options strategy to use for these setups. Done correctly it can provide accurate results.

A Pullback is a decrease of price in a uptrend, and a increase in price during a downtrend. The pullback can consist of 1-4 candles before heading back in the direction of the trend.

Lets discuss this strategy using the 15 min EUR/USD chart below.

15 min EUR/USD chart

Identifying the trend direction is the first and most important part. Please note to apply this strategy, we need a trending market in either direction. In this example we have a uptrend, higher highs and higher lows. After the blue bullish candle we had 4 red bearish candles in a row. The black line represents the open of the bullish candle and plays a important role in the setup. The 4 bar pullback did not close below the open of the bull candle, telling us the uptrend is still valid and thus allowing us to jump in with the direction of the trend. We also call this, inside bars. If price did close below the open of the bull candle we had a stronger possibility of a reversal of trend, signaling to us to sit this one out.

Applying the Pullback Strategy

Patience is key when using these setups. Place a High/Call trade on pullbacks in a uptrend and a Low/Put trade on the pullbacks in a downtrend. Always be on the lookout for a reversal of trend by making sure no lower lows, or lower highs form during a uptrend and visa verse for a downtrend.