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Binary options strategy with Bollinger bands and ADX indicator

13 May 2013 • Binary options strategies

Surely one of the best Forex trading strategies found on www.opzionibinarie60.com, that is the most authoritative italian strategies site of binary options, is the retest on Bollinger bands with ADX indicator. This strategy shows a series of impressive achievements. Let’s see how to use it.

Forex trading strategy

You must first analyse a Japanese candlestick chart with time-frame of 60 seconds (m1). Then you need to select an asset, and associate to it the bollinger bands 20-2 front-weighted. Now you must add the ADX oscillator. At this point it should be expected that the level of the price goes to make a retest on bollinger bands and invest to rebound with a maturity of 120 seconds. So, if the level of the price touches the lower Bollinger Band you will invest upward (call, up), and when it touches the band bollinger higher you have to invest downward (put, down).

Every blue arrow in the following images is a profitable investment

Forex Trading binary options with Eur USD

 

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Forex trading aud usdBut what does the ADX indicator? It is used to delimit the area where we can trade. Since we are looking for a cross-market,  it is necessary that the ADX is below 30, preferably below 20. In the images shown below you can see the incredible number of successes you can get in one trading section of approximately 3 hours. It’s really impressive to see the results of applying this strategy every day. The number of profitable investment is always much higher than the number of incorrect investments. It is a strategy that we see generally applied every morning from 9:00 to 12:00 Italian time, and always with great success. Surely it is a great way to make trading with binary options. It is essential that the broker used for this strategy, allow to invest in binary options with a maturity of 120 seconds.

Best broker for this strategy: 24option

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Bollinger Bands

Brief Description:These are volatility bands that come below and above a moving average.

The development of the bands is directly associated with a famous trader and broker, john Bollinger. The bands have remained a powerful technical trading tool since their establishment in the early periods of 1980s. During that time, observation and trading was too static and hence the need for dynamic volatility in trading and observation.

Purpose of Bollinger bands

Provision of comparative definition of low and high. At the upper band, prices are always high if definition is anything to go by. On the other hand, the lower band records low prices. This definition helps in the recognition of a rigorous pattern that becomes very helpful in comparing the actions of indicators and price so as to arrive at trading decisions that are systematic in nature.

Composition of Bollinger Bands

They are made up of a three curved set.teh curves are drawn in a specific pattern relational to the price of securities.

Middle band; basically it forms the basis for the other two bands, lower and upper. In its practical form, it is a simple moving average line that measures the short term trend. In other words, it is used for intermediate analysis.

The distance between the middle band and the other bands- both lower and upper is computed by volatility, which is usually the standard deviation of similar data used in determining the average. Default parameters of 2 standard deviation and 20 periods have been realized. However, these parameters are adjustable just to be a good suit to your purposes.

In today’s business world, traders have come to a point of appreciating Bollinger Bands as an extremely reliable tool for the assessment of anticipated price actions. The bands have found wide application in the entire financial markets; for instance commodities markets, equities, futures, forex and in other time frame transactions ranging from short term periods to longer periods such as weekly and monthly.

Bollinger bands have found their application in binary options. Various types of binary options products are trading in the market. Some of these types are:

Digital/standard binary options; these are the common binary options. They work in a simple way where you are only required to make a prediction that an underlying asset’s price will either rise or fall at the expiry time of a given trade.

Touch; these binary options can assume different sizes and shapes. Consists of No Touch, One and Double Touch.

One touch is available as digital binary options; double touch means that the determined value of the asset has to come twice before the expiry of the trade. No touch on the other hand is when the underlying asset’s price does not have to be necessarily touched.

Boundary; these are common in markets with static price movements.

Turbo; these binary options have a short span in that their expiration comes so quickly, usually in 5,2 or 1 minutes. Some are super turbo and expire within 15 or 30 seconds.

BROKER Min. Deposit Min. Trading Payout Review
Binary Options Broker 24option $250 $24 88% REVIEW
Binary Options Broker IQ Option $10 $1 92% REVIEW
Binary Options Broker BDSwiss $100 $5 83% REVIEW

Interpretation of the Bollinger Bands

Squeeze breakouts; this theory holds that the market will oscillate and make cycles between the two volatility periods of high and low. A low volatility period occurs when Bollinger Bands appear as if they are squeezed together. It is at this point when traders position themselves strategically ready for a breakout when volatility resumes back again into the market.

Increasing volatility; this signal will be observed when the lower and upper bands move in the opposite directions. This is good evidence that a trend exists in the market and therefore one should stay in a trade.

Steady trend; the signal appears when the bands point and move in the same direction. The movement could be a steady down or upward. The best strategy to use in this kind of a market is trading in pullbacks.

End of trend; this signal marks the conclusion of a trend. For instance, in an uptrend, it will occur when the upper band makes a slight curl downwards. End of trend signal is that point when the price consolidates either sideways or by making a range type motion that touches the other band.

Support and resistance; both the bottom and top bands experience some support and resistance. For instance, if you are transacting the 15M, then search for those levels of resistance and support on the 1H chart. While on the 1H chart, look for the 4H and monitor it keenly. What is the significance of the 4H? It corresponds to the daily.

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