Best Bollinger Bands Strategy For Binary Options

Today we will not simply talk nigh one of the indicators but also suggest specific signals that you tin can implement in the Bollinger Bands strategy. Bollinger bands are used to mensurate volatility relative to the moving average. They consist of two lines that run on either side of a 20 unproblematic moving boilerplate. As the gap between the bands widens, the higher the volatility and vice-versa.

In this guide, I’ll teach yous, how to ready Bollinger Bands on the IQ Option platform. Next, I’ll show you lot how to read Bollinger Bands to determine the all-time trade entry points.

Bollinger Bands Indicator overview

In lodge to be able to create a Bollinger Bands strategy information technology is very of import that you lot have a good understanding of the structure and performance of the indicator.
Bollinger Bands
are created by two bands (lines) that run on either side of a SMA20 line. This indicator is used to measure marketplace volatility. Every bit such, they can be used to assist you lot predict the best trade entry points.

The three lines of the Bollinger Bands indicator are as follows:

The
upper band
is equal to the SMA20 added to twice the xx twenty-four hour period standard difference of the price.

The
lower band
is equal to the SMA20 minus twice the xx-mean solar day standard departure of the toll.

The
middle band
is the 20 twenty-four hours elementary moving boilerplate.

How do you add together Bollinger Bands when you’re trading?

After logging into your trading business relationship and setting up your chart, click on the indicators feature ad select volatility. Adjacent, select Bollinger bands.

Click on the Setup and apply tab on the Bollinger bands window.

Ready the period to 20. Finally, click Utilise to save the changes.

How do yous utilize Bollinger Bands effectively?

Bounces from the upper and lower Bollinger Bands

Since the indicator forms a band in which the toll moves, it seems quite reasonable to trade within this band. Then the easiest signals are when the price reaches the upper or lower band. If the toll reaches the upper ring we get ready to sell, if it reaches the lower band we go prepare to open a buy position. With but these two uncomplicated signals y’all can create a Bollinger Bands strategy.

However, many signals will create loss-making positions. Merely look at the chart beneath and you will see that with a dynamic cost move, it can reach the bottom band and continue its downwards motion. Or it can rapidly reach the upper ring and non end there at all.

Is Bollinger Band constructive?

Looking at the graph above, one might think that this efficiency varies. So how to make the mentioned Bollinger Bands signals more effective?

First, y’all can await for additional confirmation, such equally the appearance of a reversal candlestick pattern on the lower or upper band. Secondly, you can filter trend signals and only open positions that follow the direction of the long-term trend every bit determined by the EMA200, for instance.

It is likewise possible to change the width of the band. How do I modify the Bollinger Band Width? Just change the deviation parameter from 2 to 3 or higher. On the chart below you can see that this procedure will reduce the number of signals and ameliorate their quality or effectiveness. The white lines are the ribbon with the deviation parameter set to iii.

Breakthroughs of the upper and lower Bollinger Bands

The next 2 signals volition exist in opposition to the previous ones. I would propose using them in highly volatile markets. Cryptocurrencies, for case, are such a market. I would like you to starting time thinking similar a speculator yourself while reading this article about building Bollinger Bands strategy. Sometimes you lot just demand to look for methods or tricks that volition improve the tools you use. Such a flim-flam can even be the right selection of the market.

A buy signal occurs when the candle closes in a higher place the upper band. A sell signal occurs when the candle closes below the lower band. Uncomplicated, isn’t it? I have shown two such entries on the BTC nautical chart below. Every bit an improver, which I highly recommend, I have also included here the long term EMA200. It is supposed to filter trades by defining the trend. Thus, I tin can take buy positions provided that the close of the point candle is in a higher place the EMA200, and curt positions below the EMA200.

Summary of today’s Bollinger Bands strategy

As y’all can see simple rules can create a working strategy that yous can successfully utilise to trade CFDs or digital and binary options on IQ Option. I would add that although these signals contradict each other, by adding the same EMA200 equally a filter, yous can employ all iv simultaneously taking into business relationship the current market state of affairs and long-term trend. Such a strategy has a practiced chance of success regardless of trading style. It is suitable for twenty-four hours trading and scalping but besides swing trading.

Now that you’ve learned how to merchandise Bollinger Bands strategy on IQ Option, become ahead and try this indicator on your IQ Option trading account. Please share your findings in the comments section below.

Skilful luck