If you need a simple strategy for binary options with practical application of Price Action, where no more than one indicator is used, the Three Canadians strategy is for you. This system has no obscure market analysis mechanisms, lagging indicators, or complex combinations of fractal analysis. Within 5–10 minutes of familiarizing yourself with the basic concepts, you will be able to trade binary options — buying Call and Put contracts. This requires no technical, graphical, or even candlestick analysis skills. The strategy is straightforward, clear, and effective.
Why the name "Three Canadians"? Because all exchange contracts are placed exclusively on the USD/CAD – Dollar/Canadian currency pair. What does the number "3" refer to? It corresponds to the number of candles that form a price pattern (PA) and generate a signal to enter the market.
Strategy Indicators for the Pocket Option "Three Canadians"
Success in trading depends on following the main price trends — trends. Trends can be "Bearish," where sellers dominate and the price (of a stock, futures, or option) falls. Trends can also be "Bullish" — when buyers control the market, pushing quotes higher. There are many ways to identify the direction of a trend on a chart; in this trading plan, that role is played by the Moving Average (MA).
The Moving Average represents the average price over a given period of time. The indicator smooths out short-term fluctuations and is used to identify the main trend of a financial asset.
To add this tool to the Pocket Option platform chart, select it from the list of indicators:
In this trading system, the MA is set to period 10, type — Simple Moving Average (SMA). Here, the key factor is not the direction of the line itself, but the deviation of price from its average value and the subsequent return to it: the deviation is treated as a price impulse, and the return as a correction.
Price cannot move up or down without interruption. Along the way, it encounters resistance levels that limit its movement, after which a correction occurs — a market pullback. A pullback is generally the most favorable point to open a trade in the direction of the trend. Any trade executed during a pullback carries minimal risk and a high probability of profit.
The end of a correction can be observed at the average price level — in this strategy, at the level of the Moving Average with a period of 10. Specifically, a candle closing below or above the moving average during a bullish or bearish trend is considered a potential end of the correction and the first signal to open a trade.
Once the pullback is complete, the confirmation signal is the appearance of 2 consecutive candles in the same direction. For example, in a bullish trend, the required structure is 1 pullback candle pointing downward, followed by 2 candles pointing upward. The final element is the closing price being below or above the moving average.
Entry Rules
Buying a Call option ("Higher"):
- Confirm that there is upward momentum in the market. This is indicated by a series of 2–5 green bars above the SMA 10 line.
- Wait for a pullback — 1 red candle closing below SMA 10.
- Wait for 2 green candles with closing prices above SMA 10 before placing a trade.
- Place a Call trade ("Higher") after those 2 green candles, with a 60-second expiration.
Buying a Put option ("Lower"):
- Confirm that there is downward momentum in the market, with quotes trading below the SMA 10 line.
- Wait for a pullback — 1 green candle closing above SMA 10.
- Wait for 2 candles with closing prices below SMA 10 before placing a trade.
- Place a Put trade ("Lower") after those 2 red candles.
The recommended trading hours are 11:00–21:00 UTC. During these hours, volatility in the market is elevated, which increases the likelihood of a sustained directional trend.
Some tips to improve the system's effectiveness:
- Keep in mind that no strategy is 100% accurate.
- Risk no more than 2–5% of your deposit per trade — this is the foundation of money management and risk management.
- Avoid opening trades within 30 minutes before or after major economic news releases.
- Always choose a reliable broker that reliably processes withdrawals.
By mastering just a few technical analysis techniques, a novice trader can noticeably improve their trading results. For example, a solid understanding of market analysis can help avoid certain losing trades, as shown in the example below:
Conclusion
This article covered a simple trading system for buying binary options. The mechanics of one of the most widely used indicators on any platform — the Moving Average — are described in detail. We also explored the Price Action price movement pattern. Before trading on a live account, we recommend practicing your entries using this strategy on a demo account.
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