Stochastics

Thinking how to make money on binary options, beginners want to cover everything: as many assets, strategies and signals as possible. Although professionals know that more “narrow” trade gives more profit. Let’s choose four European currency pairs and check the validity of this statement.

Strategy characteristics

Type:Trend.
Timeframe:Any in the range M1-M5. In our case, M1 is used, but with an increasing period of analysis, the accuracy of the signal an increasing.
Trading asset:Any currency pair. The main requirement is a fixed (2-3 points) spread and no hidden fees.
Trading time:All Forex trading sessions.
Percentage premium option:Not less than 70-75%.

Used indicators

The strategy uses two indicators: Bollinger Bands (BB) − the horizontal direction of the BB lines confirms the presence of a flat, the breakdown of the lines will be thebinary signal of its end. If the range is wide enough, you can open options to roll back from the borders. This method is recommended only for experienced traders!

The «narrower» the Bollinger Bands price channel, the higher the likelihood of strong movement after flat completion. The opposite situation is necessary for trading on the edge of borders: the corridor must be at least 30-40 points, otherwise, the options will be unprofitable.

  • Stochastic − the oscillator will assess the current balance between buyers and sellers: the predictor above level 80 − the end of the uptrend (overbought), below 20 − the end of the downtrend (oversold).

After installing the tools, the terminal’s working window looks like this:

Binary options signals:

Once again, we remind you that options are opened when the current trend ends with a confirmed price reversal.

  • Rise (CALL) – option. The price pushes away from the lower border of the Bollinger or breaks its middle line from bottom to top.  Stochastic is above zero levels or in the overbought area.
  • FALL (PUT) – option. Opposite conditions – the price has not overcome the upper limit of the Bollinger or the price breaks the middle from top to bottom. Stochastic RSI also goes down to oversold.

Open a trade on the next candle after binary signals. Time of expiration of options has to be not less than 5-7 minutes even if as a working timeframe it is chosen of minute.

Recommendations for use:

  • Even on the minute timeframe, Stochastic rarely goes into the extreme zones and you can miss a lot of good deals. If price and Stochastic start moving in one direction − you can open an option!
  • Experienced traders on higher timeframes can open trades using only Stochastic to monitor the “market pulse”, but this approach is more suitable for the stock market, where the trends are calmer. But in a dynamic Forex market, there is always a risk of a rapid reversal of even a long-term trend, so take into account the data of other technical tools and live trading signals.
  • During the publication of important fundamental news and statistics, we do not open options 30 minutes before the news and 30 minutes after the publication; cautious traders can close current deals. To control the events, we use the economic calendar included in the all popular binary trading platform!

Intraday strategy «Europe» represents a rather reliable system of a conservative scalping for trade in the stable market. Parameters of trade tools can be changed according to the current volatility. Once again, we remind you that most profitable binary options signals will only be on trend areas, during the flat periods we remain out of the market!

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