Point strategy for binary options trading (Bollinger Bands)

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Trading strategy on Bollinger bands

The previous strategies that I described were based on stochastics, relative strength index (RSI) and moving averages. Today I will show the use of another popular indicator, also popular in Forex – Bollinger bands. Bollinger bands for binary options are convenient because they allow you to trade not only with classic options, but also to try their hand at such kinds of contracts, as Range and One Touch. In addition, this indicator gives a fairly accurate signals for entry, which hardly needs proving supporting additional indicators.

Bollinger bands for binary options

Bollinger bands for binary options — technical analysis tool, which allows to estimate the location of the price relatively to normal shopping corridor. Represents the upper and lower limits around the moving average. Signal is output of the prices beyond the retail corridor (the break of the upper or lower range limits). The indicator also signals about market volatility, showing how much the price is too high or too low in comparison with moving average (shows the deviation from the schedule).

The Bollinger bands show the range in which ranges the price chart. The price reaches the upper boundary, repels from it, goes to the bottom. The essence of the strategy is relatively simple: if the price is approaching the range limits, you can expect a reversal. In the figure, the pivot points marked with ovals.

The advantages of such trade are obvious — the indicator is suitable for any timeframes, but there are limitations: since the strength of the trend is not clear, the strategy applies only for short-term scalping strategies. In other words, the period of expiration is not more than the 1st candle.

The conditions for opening a buy trade:

  • current candle opened within the range of Bollinger bands;
  • andle crossed the lower boundary of the top-down;
  • candle has closed below the lower boundary of the Bollinger band.

Conditions for opening sell trade:

  • current candle opened in the range limit, but its growth certainly suggests that the candle will cross the border of the upper range;
  • current candle closes above the upper band of the Bollinger band.

Important: the figures show the range from the basic parameters of the indicator (default). However, for different assets, the percentage of false signals can profit more or less. That’s why experienced traders set the skew parameter of “2” or “3”. Bollinger bands for binary options get wider, the price rarely reaches the edge of the range. On the one hand, this increases the likelihood of a successful transaction, on the other hand – good signals appear less frequently. The need for setting the deviation for each underlying asset is determined empirically.

There is also a strategy in which a trader opens a position in advance, when the candle not yet reached the end of the range. When approaching the upper boundary, – option for a fall is purchased. Strategy only works on short timeframes or on the flat.

As it can be seen from the figure, only 2 signals have made a loss, while 10 made a profit. The following is a practical example on IQ Option broker trading terminal. Bollinger bands for binary options can be used in conjunction with other indicators that show the strength of the trend. This will increase the number of entry signals weeding out false ones.

Стратегии на основе полос Боллинджера

Стратегия “Полосы Боллинджера с индикатором RSI”

Возможности валютного трейдинга безграничны. Даже если трейдер использует стандартные индикаторы из МТ4, такие как полосы Боллинджера или RSI. Нужно осознать, что прибыльный сетап может быть и простым.

Самое важное при использовании простых индикаторов — четко определить момент открытия и закрытия сделки. Давайте рассмотрим интересную стратегию, где используется RSI и Bollinger Bands (ВВ).

Индикатор Волны Боллинджера — стратегии, принципы работы

Индикатор Волны Боллинджера – это еще одна версия скользящих средних. Инструмент образует канал на рабочем графике валютной пары, который состоит из трех линий. Центральная – обычная SMA 20. Две другие получены путем добавления и вычитания из средней двух стандартных отклонений. Рассмотрим работу индикатора Волны Боллинджера – стратегии и приемы торговли.

Полосы Боллинджера — стратегия для бинарных опционов

Полосы Боллинджера — один из самых популярных индикаторов технического анализа как на рынке Форекс, так и для бинарных опционов. Несмотря на то, что платформы последних на настоящем этапе не оснащены мощным функционалом, этот инструмент присутствует практически в каждом терминале каждого брокера. Тем не менее, предварительный анализ гораздо удобнее проводить в платформе МетаТрейдер. В чем преимущества индикатора?

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Стратегия на основе полос Боллинджера – SMA и ВВ

Стратегия на основе полос Боллинджера “SMA и ВВ” предоставляет трейдерам возможность торговли на дневном и часовом графике любого актива. Используется всего 2 простых индикатора из стандартного набора МetaТrader4:

Стратегия на основе полос Боллинджера – RSI + BB

Стратегия на основе полос Боллинджера “RSI + BB” эффективно соединяет сигналы от двух индикаторов (полос Боллинджера и RSI), позволяя трейдеру уменьшить количество ложных сигналов. Давайте кратко рассмотрим характеристики обоих индикаторов, чтобы лучше понимать, почему их комбинация позволяет улучшить показатели торговли.

Стратегия на основе полос Боллинджера – BB + ZigZag

Стратегия на основе полос Боллинджера “BB + ZigZag” позволяет трейдеру торговать, комбинируя эти 2 индикатора, что увеличивает количество прибыльных сигналов. Для лучшего понимания сути стратегии рассмотрим, как работают оба индикатора. Полосы Боллинджера (ВВ) представляют собой 3 полосы – среднюю, нижнюю и верхнюю. Их стандартные настройки следующие: средняя – это Simple Moving Average (SMA), период 20, нижняя – SMA минус 2 СО (стандартных отклонения), верхняя – SMA плюс 2 СО. По сути, ВВ представляет собой коридор, при выходе цены за его границы трейдер может заключать успешные сделки.

Bollinger Bands Trading Strategies to Use for Digital Options

Bollinger Bands are a popular and useful tool, but they can confuse you as a trader if applied incorrectly. Read on to learn everything you need to know about how to use this strategy to your trading advantage!

A Sword That Cuts Both Ways

Have you ever heard the saying about a sword that cuts both ways? It can be applied to a lot of different things, but it is basically applied to anything that is intended to do one thing while risking the opposite effect.

When it comes to Bollinger Bands, I think it appropriate to caution traders to take it slow; don’t get too far ahead of yourselves, but focus on one use of the tool at a time, get accustomed to it, and relax. The problem with Bollinger Bands is that there are a wide range of uses and trading techniques it can be applied to, and that range makes it very easy to get mixed and/or conflicting signals. This is a quick look at three (3) basic applications of Bollinger Bands trading techniques useful for short term traders using digital options on the IQ Option platform.

Digital Options are a ladder style option with expiry every 5 minutes. Traders can choose in the money, at the money, or out of the money strikes to suit risk preferences.

Support and Resistance

Bollinger Bands are great tools for finding and confirming support and resistance. The best thing about them is that they provide a dynamic support and resistance, once that changes as the market changes. When the market is calm, the lines move closer together because prices are hovering near a point of equilibrium between buyers and sellers. When the market is active, the lines move farther apart because prices are volatile and support/resistance zones are shifting. Volatility is an undeniable part of trading, so it’s important to know how to read it.

Regardless of their width, bollinger bands can be used as targets for entries and exits. Like most tools, these indications are best when used in some type of trend-following manner. If prices are trending higher, touches to the lower boundary and to the mid line can be used as trend following support entries. Meanwhile, if they are trending lower, touches to the upper boundary and the mid line can be used as trend following resistance entries.

Multiple Time Frame Analysis

Multiple time frame analysis is the power behind the Stochastic Power Play technique I described a few weeks ago. It uses a longer time frame to determine trend and a shorter time frame to get signals. Bollinger Bands work well in any time frame and are well suited to this type of analysis. Use a Bollinger Band on a daily chart to get entries on an hourly chart, or use and hourly chart to get signals on a 10, 5, or 1 minute chart. If, on the longer time frame chart, the price is bouncing up from the lower signal line, or up from the mid line, then look for bullish entries on the lower time frame. If, on the longer time frame, the price is moving down from the upper signal line, or down from the mid line, then look for bearish entries on the shorter term chart. Digital Options traders may want to use a 30 minute or 1 one hour chart for trend and major support resistance then move down to 5 minute or 1 minute charts for signals.

Signal Line Breaks

Bollinger Bands are best thought of as trading ranges — dynamic highly elastic trading ranges — that give signals in the same manner. When prices are ranging or range bound, they will move up from support and down from resistance as in the first technique I described in this post. If, however, prices break through a signal line they can give a much stronger signal. The caveat is that it must be a firm break of the signal line because you don’t want to confuse it with a test of resistance.

A break of the line, either the top or bottom or the mid line, is an indication of changing market sentiment and constitutes a break out. Prices can be expected to continue on in the direction of the break out, or if they fall back from that point to retest the point of break for support/resistance. The mid line does count in this technique as it will often provide support/resistance as well. A break to the upside is bullish, especially if found within an up trending market, a break to the downside is bearish and strong when found in a down trending market. This one hour chart shows a number of bullish, trend following line breaks that all result in at least one more candle of further upside.

Have you traded with Bollinger Bands? If not, try starting out with one of the techniques mentioned above. Use your demo account to get a feel for it, and apply it to your next trade when you’re ready. As always, we wish you a pleasant trading experience!

NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
In accordance with European Securities and Markets Authority’s (ESMA) requirements, binary and digital options trading is only available to clients categorized as professional clients.

GENERAL RISK WARNING

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
87% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

GOD Strategy Binary Option Trade + Video

GOD strategy is said to be one of the most successful strategies for binary options with one minute (60 seconds) expiration time. But is it true? It’s based on 3 indicators and its signals are relatively accurate. They are also generated very often. On average one signal every 15 minutes. Read on to see whether this strategy is profitable or not.

How to set up the chart

Timeframe: M1
Template: GOD Strategy (Working 2020 download)

How does this strategy work

For trading we use signals marked by arrows and circles. Black circles appear based on the use of the well known ADX indicator which itself can not be seen directly in this stratgy. However you can download it separately and insert it. The circles themselves are a pretty accurate signal.

The second signals are red arrows which are generated when the price leaves Bollinger bands. Third signal type of indication is a stochastic indicator which must be best according to our trade.

When to enter a trade

Placing a CALL trade:

  • A circle appears under the current candle
  • A red arrow pointing upwards appears under current or previous candle
  • Stochastic indicator points upwards
    • ► Open a Call trade for 60 seconds

Placing a PUT trade:

  • A circle appears above current candle
  • Red arrow pointing downwards appears above current or previous candle
  • Stochastic indicator points downwards
    • ► Open a Put trade for 60 seconds

What does this strategy look like?

Real life video of this strategy

You can look at the video below to see how the strategy works. In the first part of the video, we tested it on EUR/USD on the 19. 1. 2020 (after midnight) and then the next day after noon.

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