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Three Ducks Binary Options Strategy
Another binary options trading strategy is one that involves very easy steps that can be performed even by novice binary options traders. The Three Ducks binary options strategy is quite easy to implement. Aside from this, it also has the potential to provide good returns if performed correctly. The idea of this strategy is to analyze and make trades based on multiple time frames that are indicative of the trends relating to each other.
The strategy’s name Three Ducks comes from the common phrase “get your ducks in a row”, which means to make preparations for a certain task, or to become efficient and well organized. If you have seen a family of ducks swimming in the pond, you will likely see them lined up neatly in a row. This is what this strategy is all about as well. It sets up trades in order to make fruitful profit out of them. All of this is done using different charting .
The Three Ducks binary options strategy is a pretty straightforward strategy because it all the binary options trader needs to do is to follow a set of guidelines. While this strategy, has a very low complexity that is perfect for most novice of traders, it does not mean that it can not be used by expert traders as well. If executed correctly, the strategy almost always ensures that a binary options trader can minimize his losses in entered trades.
The Three Ducks strategy is a lesser known binary options strategy, and has been published by experts just recently on different trading advice websites. One thing is common among the analyses of the strategy: that it is relatively easy to master and deploy. This trading strategy is based on the use of three charts and the repetitive checking of these charts. The trades are entered manually requiring almost no prior special knowledge aside from the basics.
Perhaps the first concept that a trader should learn for this strategy is the use of multiple analysis. This is a method that resolves considerable difficulties experienced by traders in determining the current trend of their chosen assets. Traders use multiple analysis because different often provide varying opinions. Instead of looking only at one , the trader is provided with multiple dimensions to work with.
To give an example, an hourly frame could indicate that the price of an asset is currently pushing through a bullish trend. On the other hand, a longer could demonstrate that the overall trend is actually bearish and that price is merely undergoing a temporary bullish retraction. Expanding the time frames actually gives traders a more complete view of what’s going on regarding the price of an asset, as opposed to having a limited view of price movement.
If multiple are not analyzed, traders are provided with conflicting results that can lead to the adaptation of a range of varying viewpoints about the current directional movement of the same asset. Multiple time frame analysis can remedy such problems and provide a system that can give traders more accurate interpretations. The idea is for the trader to study the price action of selected assets using both long and short .
In turn, the trader can now compare findings with the intent of rejecting or verifying a viewpoint on the current visible trend. The Three Ducks strategy revolves around this concept. Basically, a trader will aim to get his three ducks in a row by studying the directional movement of an asset on trading charts using three different . If their findings are , then the trader would have identified the true trend.
Although we have mentioned that this strategy is easy to implement that even novice traders can perform it, some experts advise against it saying that it is not ideally suited for new traders because of the significant amount of skill and knowledge required to implement it correctly. Whether to use it or not is the trader’s choice. For those wondering, the Three Ducks is not a new concept as it has already been popular among Forex traders.
Mechanics of the Strategy
The Three Ducks strategy, as the name implies, involves three steps and three . The first step is to use a common SMA. Most references to this strategy use the 60 SMA, so we’ll adopt that as well. To start the strategy, the trader first looks at the biggest time difference in the chart he uses. What the trader should be looking for is whether the current price is above or below the 60 SMA chosen.
The current position should be noted and the initiative to buy should only be deployed if the price is above 60 SMA, denoting an upward trend for the market. If it is lower, disregard. Next, we consider a shorter and compare the current prices again with the 60 SMA. This allows the trader to drill down on the true nature of the trend as he can look closer at the present market trend as compared with the broader in the first step.
It may be the case that the trend is bullish on the broader and bearish on the narrower . It can also be the case that they may show the same trend. In this case, the trend is true and validated. If the 60 SMA line is again above the current market price, the trader is able to get confirmation that the price is going in the right direction, and he is on the right track. Again, if it is not above, he disregards, stops, and starts over.
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Lastly, the trader should consider the shortest to confirm his suppositions. This provides him with yet a more magnification of the current market trend. If the trader wants extra validation regarding the trend, he looks for the price going above than the last high while still being above the 60 SMA line. This represents a good buying position and a Call option may be placed here. If the reverse is true, selling positions prevail and the trader should make a Put option.
The stop loss can also be minimized with this if the trader defines a range above or below which he wishes to buy or sell. This depends on whether a trader trades by the day or is a long term trader. Nonetheless, the process is usually used in trading the major currency pairs, and also other exotic pairs. Timing for this strategy is especially important when major trading in currency pairs are affected by special instances that pose the threat for ranging markets.
Here’s a concrete example of the mechanics outlined above. Let’s presume a trader considering a certain asset. To implement the three ducks, he first needs to select three ‘ducks’ or . For this example, we will use 5 minutes, 1 hour, and 4 hour. The trader then installs a 60-period simple moving average (60 SMA) technical indicator on each of the three charts. This will be the basis of whether the price trend remains true or not.
Analysis for duck 1 is done by studying the 4-hour trading chart. Basically, the trader’s mission is to confirm whether the 60 SMA resides above or below the current price value. If price is higher than the 60 SMA, then a bullish trend is present and possible opportunities may exist to activate new CALL binary options. In contrast, if price is below the 60 SMA, then a bearish trend is prevalent indicating that selling opportunities may be present.
Analysis for duck 2 or the one hour chart is then performed. By doing so, the trader aims to verify that this chart also confirms the same verdict as duck 1. If it does, the trader can now proceed on to step 3. However, if the one hour chart contradicts the findings of duck 1 by revealing an opposite trend, then the trader needs to completely reject this asset and move onto others by starting again.
Finally, the trader inspects duck 3 or the 5 minute trading chart. If this again confirms the trend verified by ducks 1 and 2, then this is a strong signal to execute either a Call or Put binary option, depending on the trend. If the 5 minute chart does not produce evidence confirming that of the first two ducks, then the trader should abandon this asset and instead seek others by reapplying the strategy from the first step.
As each of the three ducks performs a specific function in this setup, a trader can acquire a very good verdict by implementing this strategy. The four–hour time frame serves to identify the current and prevalent trend; the second acts a secondary confirmation and the third helps identify quality trading opportunities. Consequently, the trader can gain an understanding about the price movement of assets by undertaking such a study.
You can learn about many strategies on our website. To try out this strategy, you can also choose from among the top binary options brokers we have compiled. Stay tuned for more tutorials from our site.
Three Ducks Binary Options Trading Strategy – Aim and Shoot for Profits!
Three Ducks Trading Strategy
The Three Ducks Trading Strategy is a basic, trend following strategy that can be employed by traders of any skill level. It uses many of my favorite types of analysis and comes pre-approved by Hammish Raw. Learn how you can profit with binary options by getting your ducks to line up in a row.
Get Your Ducks In A Row!
If you don’t know who Hammish Raw is by now you should. He literally wrote the book on binary options. He has been a successful binary trader since even before the wide spread use of international online binary options trading. His web site is full of binary information like this great strategy, Three Ducks Trading Strategy. This strategy is a basic following strategy that can be used by traders of any level.
What Is The Three Ducks Trading Strategy
When I first saw the title of this strategy I assumed it was talking about the candle strategy, three black crows/three white soldiers. I am glad I didn’t skip over it because I was wrong. This is a basic trend following strategy that utilizes multiple time frame analysis for short term trading. This strategy is great for short term binary options traders because signals are taken on the 5-minute charts and come with the backing of the underlying longer term trends. What are the Three Ducks you may ask? They are your three time frames. Hammish utilizes 4 hour, 1 hour and 5 minute charts and only one indicator, the 60 bar simple moving average.
How Does The Three Ducks Strategy Work
This strategy works by capturing price movement in three time frames. The first is the 4 hour chart. If prices on this chart are over the SMA then the underlying trend is bullish. At that point move down to the 1 hour charts for confirmation. On that chart if prices are also above the 60 bar SMA then that confirms the 4 hour chart and you can move down to the 5 minute chart. If prices are once again confirming the underlying trend then bullish trading opportunities should be taken. If prices are below the SMA then wait for them to cross over. The crossover itself is another buying signal. The exact same is true in reverse for bearish trades. If the 4 hour is bearish then move down to the 1 hour for confirmation. If confirmed then move down to the 5 minute charts and await a put buying signal.
Why This Strategy Does Not Suck
This strategy does not suck because it is written by a known successful trader, is well presented, provides detailed information, uses multiple time frame analysis (and explains what that is!), seeks to weed out conflicting signals, is good for short term trading and uses more than one indicator. Some strategies you find on the internet suck because they are random jibberish put up by some unknown person. Not this one, Hammish Raw is a known and respected trader. Some strategies are hard to implement because they are confusing to read. Not this one. It is well laid out and explains in detail how is works. Not only that, the strategy uses multiple time frame analysis, a pillar of my own trading strategy. It also uses more than one indicator and does a pretty good job of weeding out conflicting signals.
Why This Strategy Might Suck
This strategy might suck because everything sucks at one time or another. There are no guarantees with trading except that you will lose at some time or another. No trading strategy is fool proof and this one certainly is not. Because it starts with the four hour charts there is a strong possibility that deeper trends could prevail so I would definitely take heed of any signals presented on the daily or weekly charts as well.
My Last Words On The Three Ducks Trading Strategy
Hammish warns that this strategy may not be good for newbies but I disagree. It is a simple but effective way to trade short term binary options and one that I think newbies can embrace. I can’t stop new traders from trying their hands at ultra-risky short term binary options but I can lead them to great strategies like this one in order to help them on their path to success. More experienced traders are likely already using this strategy in some form or other even if they have never heard of Hammish Raw or the Three Ducks.
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