A Simple MACD Forex Binary Options Strategy

MACD is a very powerful indicator. MACD ( Moving Average Convergence Divergence ) is basically a trend following momentum indicator that shows the difference between two exponential moving averages of price. MACD is calculated by subtracting EMA26 from EMA12. EMA9 is the signal line. If you want to know more about MACD, you should read this article on MACD indicator. You should try to master this powerful indicator. In this post, we discuss a very simple MACD Forex Binary Options Strategy. The most important thing for you to know is when the signal line crosses the histogram and goes below it,  the momentum changes from down to up. In the same manner when the signal crosses the histogram and goes above it, price momentum shifts from up to down. This simple MACD Forex Binary Options Strategy uses this fact to enter a put or a call. Let’s see how below!

MACD Forex Binary Options Strategy

Take a look at the above EUR/USD M5 chart screenshot. Look at the first red arrow which is up, price is going down, the signal line goes below the histogram and the price starts moving up. The momentum shifted from down to up. So just when the signal line crossed below the histogram, if you had bought a call option with an expiry of 15 minutes, you would have made a winning trade.

Now look at the second red arrow which is down, this is the time when an important news item was released. This was the time when ECB Press Conference took place plus USD Unemployment claims were released. You should daily check Forex Factory News Calender which gives the times of the important news releases. This is the time to trade with this simple MACD Forex Binary Options Strategy. Price fell down sharply. If you had just bought a put with 15 minute expiry when the signal line had just gone above the histogram, you would have made a winning trade.

In the same manner, take a look at the last red arrow which is up. Price shifted momentum from down to up when the MACD signal line crossed below the histogram. So if you had bought a call option with 15 minute expiry, you would have again made a winning trade in just 15 minutes. So you could have made these 3 trades in a short span of 2 hours. Now take a look at the following screenshots which illustrate this MACD Forex Binary Options Strategy in action this time on M15 timeframe.

MACD Forex Binary Options StrategyMACD Forex Binary Options StrategyIt is the same. You enter into a trade when the MACD signal line goes above or below the histogram. This MACD indicator changes color as you can see from the above screenshot when the price momentum increases or decreases plus it also gives a sound as well as a popup alert when the MACD signal line crosses the histogram. You can download this MACD_ColoHist_Alert Indicator FREE. You will find this MACD_ColorHist_Alert Indicator in the list of indicators on this page 13 positions from the bottom.Now when you trade with this MACD Forex Binary Options Strategy on the M15 timeframe choose an expiry of 60 minutes while when you trade it on M5 timeframe, choose an expiry of 15 minutes. You can also try these Taurus Signals FREE for 7 days. Taurus Signals have an average winrate of 88% calculated over a period of 2 years.

10 Comments

  • Jonathan

    June 30, 2014

    This system sounds nice especially that alert is enabled, therefore won’t make trading boring watching charts all day.
    I have come across many strategies that I am exhausted because I just can’t sit all day watching the charts like a hawk.
    I will try it and get back to you.
    Thanks.

  • Jonathan

    June 30, 2014

    Please, I have downloaded the file and copied it to my FxPro MT4 software but I can’t add the macd indicator to my MT4 platform.
    I discovered the download file is only in mq4 source fil, there that is why I couldn’t add it to my MT4. I can only add ex4 files eg macd.ex4
    Please, I need serious help

  • Jonathan

    June 30, 2014

    I have actually successfully added the macd_alert BUT it comes with some bugs when downloaded. I was able to fix the bug and even customise it my way. With my experience on programming on visual basic, I could easily see where the error bug was and play around to fix it.
    1.) First download the mq4 file and copy it to your MT4 indicators folder (open your MT4 platform and click ‘file’, then click ‘open data folder’; open the MT4 folder and copy the downloaded file to the indicators folder)
    2.) Double click the mq4 file to open it with metaeditor. Scroll the code page down a little. Where you see **color** ‘c’0.80.0’; delete the letter c with the quotes. You should have something lik: **color** 0.80.0
    NB: I used ** because I don’t remember the whole lines. I am not near my computer now.
    3.) Repeat step 2 on the rest colours property
    4.) Click ‘compile’ on the top of the metaeditor page.
    Then yipee! You have created the ex4 file

    5.) Now close your MT4 platform and relaunch it. Add the macd alert indicator to your chart.
    THAT IS NOT ALL. You will realise the colours are not complete. Go to step 6
    6.) Right on the new macd indicator. Select properties. Click ‘colour’ and use your favourite colours.
    CONGRATULATIONS. You are good to go.

    • Carlos Franco

      April 1, 2015

      Hi Jonathan;
      Have this idea of asking your help.
      I Downloaded the software, (MACD_ColorHist_Alert Indicator) applies the corrections you suggested (the color coding issues), compiled and I´m using it, BUT can not find the signal line. I do see the MACD line and the Histogram, but not the signal line. Perhaps changing the color in the 6º statement of the colors in the source code. (Line 16 in my source). Which is the color code for yellow ? Can you help me w/ this? Tks, Carlos

      • admin

        April 2, 2015

        Signal line is the red line.

      • Jonathan

        April 3, 2015

        If you have attached the macd_colorhist on your chart(s), press ‘ctrl+I’ on your keyboard or right-click on your chart and select ‘indicator list’.

        From the properties window, select the macd_colorhist indicator and click ‘edit’ or double-click the macd_colorhist.

        From the next properties, see that ‘show signal line’ is set to true.

        I would have loved to show you pictures but there is no way I can upload them here.

        • admin

          April 13, 2015

          You can upload the pictures. Send the picture to my email. You can also upload a video on youtube and post the link here.

    • olá amigo boa tarde. eu fiz o que vc falou. fechei todos c’ mas mesmo assim continua a dar 12 erros. podes me ajudar por favor?

  • Jonathan

    July 1, 2014

    Better still, you can add the colours from the source code page instead of customising/changing colours of the macd each time you add it to a new chart. All you have to do is just replace the numbers with real colour names eg replace 0.88.0 with green or yellow.
    I had the time to really play around the macd codes and this is the idea I have to share with people:
    Open the mq4 file as usual to navigate to the source code; then scroll down to the colour properties. Below is the orderly arrangement of the property of macd to apply the colours by default:
    1.) Histogram colour when macd line crosses 0 line upwards
    2.) Momentum change from fall to rise when macd is below 0
    3.) Momentum change from rise to fall when macd is above 0
    4.) Histogram colour when macd line crosses 0 downwards
    5.) Macd line
    6.) Signal line

    There you have it. You can even customise it to display your name in copyright under ‘about’ properties. BUT I DO NOT ENCOURAGE PIRACY NOR BREACH OF COPYRIGHT LAW.
    richjoe.707@live.com +2348130323710

  • Jonathan

    July 7, 2014

    Please, what broker do you use/recommend?
    I use http://www.binary.com but I realize the price of assets are in 4 decimal places instead of decimal places as shown in MT4 platform; hence the market has to move greatly with a wide price difference before I can make a win. Also, I lose if my closing price is the same as my opening price.

    I chose this broker because they allow minimum deposit of $10 and a stake as low as $1, and I can’t afford more than $100. I would have gone for http://www.topoption.com or http://www.optionfair.com because they allow minimum deposit of $100 BUT the stake amount can not be less than $10 (1/10 of account balance) which violates the rule of 1/20 stake of PROPER MONEY MANAGEMENT.

    Also, I can chose an exact expiry time of my choice on binary.com whereas exact expiry can’t be chosen on topoption and optionfair; one can only make a rough estimate.