Title
MACD Options Strategy
Element(s)
  • MACD (25, 41, 21)
  • RSI (8)
  • Stochastic
  • Candlestick (Hammer, Engulfing, Shooting star, Piercing Line, Dark Cloud …)

Call/Higher/No-Touch signal

After price has fluctuated inside a channel, or downward trend is speculated to proceed in an opposite direction, if MACD line and bars are lower than its level 0, at the time that MACD line passes bars toward bottom then a Bullish signal is generated.

Our developed MACD can be exploited with another pattern or indicator.

Convergence, developed by RSI or Stochastic, or a significant reversal candlestick (Bullish Engulfing, Hammer, Piercing Line or Tweezer Bottom) can be considered as a strong confirmation when a Bullish signal is generated on the point that MACD line passes bar toward bottom (both MACD line and MACD bars are on the down phase).

If price reaches Entry Price of given signal will become active. In case that traders cannot place the Call order on given contract when price passes the Entry Price, then given Call signal becomes invalid. On a special occasion, after price crosses the Entry Price if it bounces back toward bottom and proceeds lower than Entry Price before ordering Call contract becomes unavailable then given Call signal remains valid and reliable.

Concerning Higher contract, given signal forecasts that price may rise over a certain value (Target Price) and stays higher than Target Price before expiration time.

Regarding No-Touch contract, generated signal predicts that price may fluctuate below certain amount (Target Price) without touching it before expiration time.

  • Entry Price: On the spot where MACD line crosses bars toward bottom
  • Take Profit: Based on other confirmations from 10 to 63 pips over Entry Price

Put/Lower/No-Touch signal

After price has fluctuated inside a channel, or upward trend is speculated to proceed in an opposite direction, if MACD line and bars are higher than its level 0, at the time that MACD line crosses bars toward top then a Bearish signal is generated.

    RSI
  Divergence/Convergence  
MACD +   Stochastic
  Candlestick  

Our developed MACD can be exploited with another pattern or indicator. Divergence, developed by RSI or Stochastic, or a significant reversal candlestick (Bearish Engulfing, Shooting Star, Dark Cloud or Tweezer Top) can be considered as a strong confirmation when a Bearish signal is generated on the point that MACD line passes bar toward top (both MACD line and MACD bars are over level 0).

If price reaches Entry Price given signal will become active. In case that traders cannot place the Put order on given contract when price passes the Entry Price, then given Put signal becomes invalid. On a special occasion, after price crosses the Entry Price if it bounces back toward top and proceeds higher than Entry Price before ordering Put contract becomes unavailable then given Put signal remains valid and reliable.

Concerning Lower contract, given signal forecasts that price may fall below a certain value (Target Price) and stays lower than Target Price before expiration time.

Regarding No-Touch contract, generated signal predicts that price may fluctuate higher than certain amount (Target Price) without touching it before expiration time.

  • Entry Price: On the spot where MACD line passes bars toward top
  • Take Profit: Based on other confirmations from 10 to 63 pips below Entry Price

MACD Options Strategy

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