A reversal is one of the key market conditions that determines whether you make a profit or take a loss on binary options. If a trader fails to spot the moment when the price changes direction, they lose money — and ignoring a reversal can lead to large losses. At the same time, it is not always easy to tell whether the price will actually reverse or whether you are looking at a temporary pullback, with the trend still continuing in the same direction. If a trader assumes it is the latter, they miss the moment when they should have closed open trades urgently or placed a new order. By the time they realise, the price has already moved a significant distance, and the trader either misses a potentially profitable position or takes a larger loss.
You can avoid this scenario by using Quotex strategies. The core principle for trading in these situations is to place orders in the direction the market is moving — and Quotex strategies are designed for exactly this approach. This is particularly relevant for binary options trading, since trades are opened on short timeframes, where signals from indicators appear frequently. The Quotex Reverse strategy, which is built on the principle of opening trades when the trend changes, uses three tools: Bollinger Bands, MACD and SMA.
Before you start buying options, remember that you can reduce trading risks by using the Quotex cancel loss trade promo code. This allows you to cancel a losing trade of up to $10.
How to Set Up the Technical Tools on Quotex
When trading trend changes, use a candlestick chart. This approach also works best with highly volatile assets, such as exotic currency pairs quoted against USD, or USD-quoted cryptocurrency pairs.
To apply this strategy, configure the indicators as follows:
- MACD — default settings;
- Bollinger Bands — period 22, deviation 2;
- SMA — period 10.
With this method, trading is recommended on a 15-minute timeframe:
Conditions and Nuances of Using This Trading Method
Before you start trading, wait for a strong trend to develop. This will show up as several consecutive candles of the same colour — you can start opening trades once at least 4–5 such candles have formed.
Trades are entered after the price has pulled back, which can be identified by monitoring the 15-minute and 5-minute charts side by side. Bear in mind, however, that these indicators can produce false signals. They may suggest that the trend is about to change after a pullback when in fact the price continues in the original direction:
Rules for Buying Binary Options
With this method, orders should be placed when a momentum move is visible on the 15-minute chart. After that, switch to the 5-minute timeframe.
Buy a Call contract when:
- the candlestick patterns are above the Bollinger Band and pointing upwards;
- the price has bounced off the moving average, which is sloping upwards;
- MACD is above the zero level.
Buy a Put contract when:
- the chart patterns are below the Bollinger Band and pointing downwards;
- the price has bounced off the moving average, which is sloping downwards;
- MACD is below the zero level.
All of the above conditions must be met simultaneously.
The expiration time in both cases is 3 candles.
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