“Three Ducks” Trading Strategy
Another simple trend following strategy is the “3 ducks” trading strategy which can be used by beginners to those more accomplished traders as well. It uses various analysis forms and explains how getting your ducks in a row can help you earn a profit from binary options.
This strategy looks at the analysis of multiple frames for trading short term. The reason it is more effective for short term trading is that the signals are worked on 5 minute charts but work off a foundation of long term trends. Your “ducks “are the time frames. If you work on 5 minute, 1 hour and 4 hour frames and a 60 bar moving average, you have the basic set up for the 3 ducks strategy.
How does it work?
Basically the price movement is captured over the time-frames as set above (5 minute, 1 hour and 4 hour). Based on the 4 hour chart, it becomes a bullish trend if the chart prices are over the SMA. When this occurs, you look at the 1 hour chart to confirm the trend. If the prices on the 1 hour chart are above the 60 bar SMA, then you know your 4 hour chart is confirmed. You then look at your 5 minute chart.
If the price trend is confirmed and matches up to the 1 hour and 4 hour charts, then you can look at taking bullish trading opportunities. If the prices are not above the SMA you will need to wait until they cross over. When a cross over happens, you could look at this as a buying signal as well. When looking at bearish trading, work on the opposite premise. If the 4 hour shows as bearish, look to the 1 hour and 5 minute charts to back this up and wait for a signal for put buying.
Why use thy strategy? Why not?
A well known, successful trader wrote this specific strategy and it is accurate and well presented. The information is detailed and the analysis is done over multiple time frames, improving accuracy while helping negate conflicting signals. It is a great strategy for short term trading and there is more than one indicator.
The strategy is simple to understand and easy to implement and can be used from amateurs to traders that have been around a while, quite successfully. Have more than one indicator and using 3 time frames improves the accuracy of this well developed strategy. As with any strategy, this one is not foolproof though and for even more accuracy in trend predictions, you might want to look at daily and weekly chart results as well. This strategy also offers a lot less risk than some of the others that are offered to new people for short term binary trading.
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