The Trade Like a Pro binary options strategy reflects the renowned Smart Money Concept (SMC). This approach to trading is based on analyzing the actions of major institutional players, who essentially shape the modern financial market. The basic idea is to follow this "smart money" when trading binary options. Learn how to do this in this review.
Content:
- Characteristics
- Installation
- Overview and settings
- Trade Like a Pro Trading Rules
- Specifics of application
- Conclusion
- Download
Characteristics of a Binary Options Strategy
- Terminal: MetaTrader 5
- Timeframe: M15
- Expiration: 3 candles
- Option Types: Call/Put
- Built-in indicators: TradeLikeaPro - Smart Money Concepts.ex5
- Trading instruments: currency pairs, commodities, cryptocurrencies, stocks
- Trading hours: 8:00 - 20:00 (GMT+2)
- Recommended brokers: Quotex, Pocket Option, Alpari, Binarium
Setting Up a Strategy for Binary Options
You can download the TLAP strategy indicators from our website and install them on your MetaTrader 5 terminal using the standard method. First, open the terminal and select "File" → "Open Data Folder" from the top menu. In the window that appears, navigate to the MQL5 → Indicators folder and copy all the indicator files there.
If the package includes templates, move them to the Templates folder in the Profiles directory of the trading terminal. After that, restart the platform for the new indicators and templates to appear in the list.
Binary Options Strategy Overview and Settings
The Smart Money concept is complex and extensive enough to be fully explored in a single review. Therefore, we'll focus on the elements directly used in binary options trading. However, first, let's explore the acronyms that represent key elements of market structure analysis. These form the framework for any price movement, revealing who currently controls the market — buyers or sellers.
As we know, in a bullish trend, the price consistently forms higher highs (HH) and higher lows (HL). Conversely, in a bearish trend, lower lows (LL) and lower highs (LH) occur.
The next structural element is the acronym ChoCH, which stands for "Change of Character." This is the first sign of a possible trend reversal. It alerts traders to a shift in the balance of market power. ChoCH appears when the underlying rule of the current trend is violated: for example, in a bullish market, the price breaks below the last significant low (HL). This breakout is the ChoCH.
While it doesn't guarantee a market reversal in itself, it serves as an important signal that buyers are losing control. After this marker appears, traders using the SMC concept stop looking for opportunities to buy call options and start considering opening put options.
A BOS (Break of Structure), or "breakthrough of structure," is a signal of continuation of the current trend. When the price is in an uptrend and confidently breaks the previous high (HH), it is a BOS. This breakout indicates that buyers are still strong and intend to push the price further upward. In a downtrend, a Break of Structure occurs when the price breaks the previous low (LL), confirming sellers' strength. Thus, each new BOS mark in the direction of the main trend strengthens the trader's confidence that they are still in power.
Taken together, market behavior follows a specific pattern. First, a trend forms, confirmed by a series of BOSs. Then, a CHoCH occurs, disrupting this sequence and warning of a possible reversal. If, after a Change of Character, the price actually reverses and begins to form a structure in a new direction, breakouts in this direction are considered new BOSs, confirming the trend shift.
As you might guess, the trading signal for opening deals to buy Call options is the first breakout of BOS in the direction of the new trend after a change in trend – CHoCH.
As the image above shows, after a false breakout, the EURUSD currency pair reversed, forming a bullish CHoCH. Then, after a brief flat, the euro continued to strengthen against the US dollar and broke through a local high, forming the first bullish BOS. This is the optimal time to open a call option, as we are looking at a trend that is gaining strength and has confirmed its direction with two consecutive breakouts of local highs.
As for Put options, they should be opened in a similar situation, but in reverse. You need to wait for the first bearish CHoCH to appear, followed by a bearish BOS. As soon as you see this pattern, you can safely open Put options to short, as we're looking at a bullish market reversal, confirming its intention to move lower after the first Break of Structure in this direction.
Now a few words about the TradeLikeaPro Smart Money Concepts settings. This indicator has numerous parameters, the main ones are highlighted in the image below. Here you can customize the color and display type of structural market elements, order blocks, imbalances, and much more, allowing you to more accurately identify market patterns.
If you'd like to learn more about candlestick patterns and how to properly apply them to binary options trading, check out our collection of articles on this topic:
- Candlestick analysis and binary options
- Japanese Candlesticks for Beginners and How to Read Them
- Japanese Candlesticks – Graphic Analysis
- Using Pin Bars in Binary Options Trading
On our website, you'll find a wealth of useful materials that will help you better understand technical techniques and improve your skills.
Trade Like a Pro Trading Rules
Trades using this professional strategy should be opened at the start of a new trend, as this is the safest period of price movement. To do this, wait for the first Change of Character (CHoCH) and the subsequent Break of Structure (BOS). Upon seeing this combination of markers on the chart of the traded asset, a Call option should be opened if the BOS was bullish, and a Put option if the BOS was bearish.
Opening a Call Option
- Wait for the green Change of Character (CHoCH).
- Wait for the green BOS to appear.
- At the opening of the next candle, open a Call option.
Opening a Put Option
- Wait for the red Change of Character (CHoCH).
- Wait for the red BOS to appear.
- At the opening of the next candle, open a Put option.
We recommend setting the expiration time to three candles. However, the optimal holding period depends on the specific asset and should be determined by you based on historical data testing results. This approach will help tailor the strategy to the specifics of the chosen instrument and improve its effectiveness.
Specifics of Using Binary Options Strategy
Based on our observations, this trading strategy is most effective on M15 timeframes and higher. Using shorter timeframes may reduce the stability of results and is therefore not recommended. Detailed information about the SMC methodology can be found on specialized websites dedicated to trading and technical analysis.
Advantages of the Strategy
The system's advantages include the fact that it's not just a set of rules, but an entire philosophy—an attempt to read the market through the actions of major players. Unlike indicator-based strategies, TLAP forces traders to consider the reasons behind price movements. It helps them stop seeing chaos in the market and begin to see logic in price behavior. This strategy is universal and can be applied to any market and timeframe, as it's based on pure price action.
Disadvantages of the Strategy
Among the disadvantages, we note the need to learn new concepts: BOS and CHoCH. Mastering the strategy will require time and practice to accurately recognize the necessary formations for opening trades.
Conclusion
The Trade Like a Pro binary options strategy is a powerful tool in the hands of a patient and disciplined trader. It provides a deep understanding of the market, typically unattainable with other approaches. This system requires time to learn and is unforgiving of impatience.
However, by devoting sufficient attention to mastering the concept of "smart money," a trader is likely to gain a fresh perspective on binary options trading. In any case, before implementing the TLAP strategy in practice, we recommend testing it on a demo account with a broker with a minimum deposit. May the trend continue!
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