Another Binary Options Strategy
This is one of the simplest and at the same time the most effective binary options trading strategies.
In this case we use a popular indicator available from any analytics package, the RSI (Relative Strength Index).
This whole strategy is based on a suitable selection of RSI’s and use of appropriate time frames. It work best on 5-15 minutes binary options.
You should always check efficiency of the strategy before using real money. We recommend uTrader broker, with its risk-free demo account.
As it is a very simple system, it can be freely modified by matching their individual trading needs, capital management system and exposure to risk.
To start trading using the RSI CCI Binary you have to run MetaTrader 4 and activate the RSI indicator (Insert -> Indicators -> Oscillators – Relative Strength Index). You should see the following window:
This strategy uses the standard settings of the indicator, so there is no need to modify any option. You just have to confirm it. Now on the bottom of chart you should see new window with a line and two horizontal levels – 30 and 70:
- If the line is above 70 the market is overbought;
- If the line is under 30 the market is oversold.
The rules here are really simple. When the RSI reaches the 70 level, from below, we open a PUT option, when it reaches level 30 from above we open CALL option. We have to open position few seconds before close of current candle. You can see it below.
As you can see, the price is generating more signals then I marked (there is more chance of failure). This is why this strategy is supplemented by additional indicator – CCI (Commodity Channel Index).
Open this indicator in MT4 as follows: Insert -> Indicators -> Oscillators – Commodity Channel Index. You don’t have to change any options.
Signals generated by RSI CCI Binary:
- If the RSI reaches 30 or 70 level but CCI is outside middle range (-100 to 100) we do nothing
- If the RSI reaches 30 and CCI is between -100 to 100, we buy a CALL option
- If the RSI reaches 70 and CCI is between -100 to 100, we buy a PUT option
You can see it in the example below:
- In situation (1) RSI reaches 70 line, but CCI is clearly above 100 pts ; do nothing
- In situation (2) the RSI reaches 70 line and CCI is in middle range – we buy a PUT option
- In situation (3) the RSI reaches 30 line and CCI is in middle range – we buy a CALL option
CCI is just an additional indicator to filter signals given by the RSI. Although it can filter some profitable positions, it filters mostly the bad ones. You can check this strategy with uTrader – binary options broker with a risk-free account.
- RSI and CCI – default settings
- CALL – RSI reaches 70, CCI between -100 and 100
- PUT – RSI reaches 30, CCI between -100 and 100
- M5 chart – options expiring in 5 or 15 minutes
- Open option – few seconds before close of current candle.