Bollinger lines earnings on binary options. How to use a binary options strategy. Instructions for beginners. Trading in the direction of the price channel

Bollinger waves are a unique tool for identifying overbought and oversold areas. The indicator has three lines, of which the central one shows the boundary between two opposite market states.

Up from the central curve and to the upper outer border is overbought territory, and down from the middle line to the bottom is oversold territory ().

The indicator was developed back in the eighties, and today it is widely used, although most traders prefer to use waves together with other tools. Today we will look at the Bollinger Wave strategy without additional algorithms, which is well suited for binary options trading.

For example, let's use the Olymp Trade platform. In the main terminal, go to the "Technical Analysis" tab on the right top corner(Olymp Trade trading terminal). Then it loads additional window with the ability to customize indicators on the chart.

Bollinger Wave Strategy

Typically, when using a tool that shows oversold/overbought areas, signals for action are given by passing certain levels. In the case of the Bollinger Wave strategy for binary options, the control levels are the upper and lower boundaries of the corridor.

When the price passes through the upper limit, this is a signal to buy a downside option, since after such a breakout a downward movement is expected. If the market has passed the lower limit, then an up option is purchased. This means that the market has reached oversold conditions and, accordingly, should go up.

An example of an entry is shown in the following illustration. As you can see, after passing through the upper line of the indicator, a downward movement occurred. Expectations were justified even after reaching the bottom line.

Expiration of options within the strategy

Reviews of two more quality strategies:

Advantages and disadvantages of the system

Still, in most cases, when moving sideways, Bollinger Waves are right and this is their advantage. The indicator is very easy to use, but it also has disadvantages.

A significant disadvantage is that protracted series of repeated border breakthroughs occur. This may be acceptable when working on other financial platforms, but for binary options this circumstance is dangerous. In binaries, the time it takes for the market to pass through the opening price plays an important role.

The default settings for Bollinger Waves are 20, 2, where:

• 20 - the number of periods on the basis of which the moving average is calculated;
• 2 is the number of standard deviations, that is, the distance from the center line to the two outer lines.

The creator of the indicator, John Bollinger, believed that these were the optimal settings, but they could be changed if desired.

If you increase the periods of the moving average, the central line will be more averaged, that is, it will be less sensitive to market movements. As the number of standard deviations increases, the distance between the center curve and the outer lines increases. In this case, the number of signals will decrease, since the market will reach the borders less often.

Bollinger waves in binary options– “Night Bollinger” strategy

Day trading has been made the standard for options trading with trend and volatility present in the market. Of course it is. However, the strategy Night Bollinger“convinces the opposite, demonstrating profitability many times higher than day trading strategies. This means that night is not only a time for sleep...

Bollinger Waves - an excellent free indicator for binary options

So what can we say about ? This is a fairly accurate indicator, suitable for binary options, without redrawing, which is a channel indicator and displays the price of the asset and those levels where the price deviates the most from the average. This is how this indicator is displayed on the chart:

But an additional advantage of this indicator is that it generates the most accurate, and therefore profitable trading signals at night.

That is, when quotes move calmly in the night channel, reaching its boundaries with their fluctuations, which indicate the maximum deviations of quotes from the average price value, and, having reached these boundaries, return back to the middle of the channel, that is, to the average price value.

This nature of night quotes is due to the sleeping period of almost all financial markets in the world, so trading is suspended, causing quotes to take an almost horizontal position in movement. It was during this period free indicator for binary options - Bollinger waves can produce signals that can be used to close 7-8 out of 10 trades with a profit. Great result, isn't it? This means that in order to receive it, you can give up several hours of sleep.

Bollinger waves in binary options trading – the best choice of broker for trading

The problem is that in almost all cases this profitable indicator for options is rare. Moreover, the opportunity to trade on a chart in general is available in trading terminals of only a small number brokerage houses options market. And in order to make excellent money, you must be armed with a trading terminal on which technical indicators are available. We managed to find such a terminal - at broker Binomo.

All screenshots in this article were made from the platform of the specified broker. And if you are also a novice trader and you need binary options for minimum investment into trading, then at the Binomo broker you will find the most suitable trading conditions - the minimum transaction is 1USD, and the minimum deposit is 10USD.

How to trade?

Since quotes move along the night horizontal channel at night, and Bollinger waves show maximum price deviations from their main level, you can receive profitable signals by noticing the joint movement of quotes with the indicator lines. That's why:

For a DOWN trade:

First, there is a dynamic growth of quotes upward, crossing the limits of the upper Bollinger channel wave.
After crossing the Bollinger channel limits, the quote candle closes below the upper channel line.
And only after the above conditions are met, the trader can enter into a DOWN transaction on the Binomo terminal:

For an UP trade:

First, there is a dynamic downward decline in quotes, crossing the limits of the lower Bollinger channel wave.
After crossing the Bollinger channel limits, the quote candle closes above the lower channel line.
And only after the above conditions are met, the trader can enter into an UP transaction on the Binomo terminal:

The scenario for the nightly movement of quotes is such that the price returns back to the Bollinger channel, after quotes go directly beyond its limits, occurs in 90% of cases. Therefore, it is most profitable to enter into transactions using the “Night Bollinger” tactic we described, which will help you make a profit on 80% of 100 transactions.

You can open an account with Binomo HERE

Expiration time

You must use a 60-second expiration period for transactions, which the Binomo platform sets by default.

We manage capital correctly

Thanks to Bollinger waves, you can make great money in binary options. However, even such high profitability does not allow you to risk inflated transaction amounts. That is, only 3% of the deposit amount needs to be used for transactions, which will help avoid its overload. And if your deposit is small, you can trade 1USD on the Binomo platform.

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Strategy using the Bollinger indicator

Today I decided to tell you about the Bollinger scalping strategy. This trading technique is intended for use on short time frames, namely one-minute and five-minute. As for the currency pair, according to the author of the strategy, it can be any, but it is advisable to use assets with high and medium volatility. Today we will use the pound/dollar pair as an example.

Indicators for the Bollinger strategy

The Bollinger strategy involves the use of several indicators. Now let's transfer these indicators to the chart. The first main algorithm is the Bollinger indicator. In total, you need to transfer three indicators to the chart at once, all of them will have the same period equal to 50, but with different deviations, which should be equal to 2, 3 and 4.
The second indicator is called . This tool should have a period of 8, and in the “Levels” section you need to add levels 30 and 70. This algorithm is needed in our strategy to filter out false signals.

The third indicator is called Stochastic. It should have the following settings: 14, 3 and 3. In the “Levels” section you need to indicate additional levels, namely 20 and 80. We need this tool, like RSI, to filter out false signals.

And the last indicator is an exponential moving average with a period of 50. This algorithm is intended to more accurately identify points for entering the market.

If you correctly construct the indicators described above, you will see the same picture as in the photo below.

In order not to have to build indicators yourself, you can download ready-made template for this strategy. You can do this using the link below.

Rules for entering the market using the Bollinger strategy

So, we’ve figured out the indicators, now it’s time to look at the rules for entering the market. To open buy transactions, the following conditions must be met:

• The downward price must break through the upper boundary of the Bollinger channel, which has a deviation of 2, after which it must go at least halfway to the curve with a deviation of 3.
• The RSI indicator curve should be located in the oversold zone.
• The Stochastic curve should also be located in the oversold zone.

You can see an example of opening a buy transaction in the following picture.

Sell ​​positions are opened subject to the following conditions:

1. The price level above crosses the red Bollinger line. In this case, the price must travel half the distance between the red and green lines.
2. The RSI instrument curve should be located above 70.
3. The curve of the Stochastic instrument should be located above the 80 mark.

The picture below shows the situation for opening a sell position.

The average profitability of trades opened using this strategy is 25 pips. There are two methods for setting Take-Profit:

1. You can apply a fixed Take-Profit at a distance of 25 pips from the place where the position was created.
2. Take-Profit can be placed close to the moving average, which has an orange tint (period 50).

The Bolinger strategy does not involve setting Stop-Loss. But if you want to make trading safer, you can set a Stop-Loss, the value of which is twice the Take-Profit.

Relatively recently, an automatic trading robot was created based on the Bollinger strategy. This advisor allows you to earn income from creating transactions using the Bollinger strategy without the direct participation of the trader.

Experienced speculators tested the advisor based on the Bollinger strategy. The test was carried out over the course of a year on the pound/dollar currency pair. You can see the results of the testing in the following picture.

During the first six months, the robot managed to double the deposit. The second six months were less successful, as a result of which the balance of the account decreased by 70%. In just one year of testing, the robot generated a return of 29.4%, which is a pretty good result. During the entire trading period, the maximum drawdown did not exceed 51%.

In parallel with the first test, this advisor was tested with optimized parameters. Changes have been made to the parameter responsible for closing positions. For the Close type characteristic, the value 5 was selected. The following picture shows the performance of the advisor with optimized parameters.

According to the test results, the advisor showed a fairly high profitability of 200%. But at the same time, a fairly high drawdown value of 83.88% was recorded.

Also, the optimized version of the robot was tested on the euro/yen currency pair. The robot's profitability on this currency pair is shown in the following photo.

When testing the robot on the euro/yen currency pair, its profitability was 100% of the size of the deposit used. At the same time, a drawdown of 34% was recorded, which is an acceptable result. During the entire testing period, the robot created only 59 positions.

Having analyzed the results of testing the advisor based on the Bollinger strategy, we can come to the conclusion that the best option is to use an optimized version of this trading robot on the euro/yen currency pair.

The Bollinger strategy is an effective trading technique that, if used correctly, can provide a small but stable income.

Before you start using this technique for creating positions to trade for real cash, it is recommended to test it on a demo account. Only after you learn to correctly interpret the signals of this trading strategy and use them to open positions, you can start trading with real money.

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The task of every binary options trader is to be able to correctly determine the beginning and end of upward and downward price trends. For these purposes, it is customary to use trend indicators. The most informative and accurate among them are waves, lines or Bollinger bands. A strategy that works on the basis of this indicator can bring the trader a consistently high income.

You can trade using Bollinger Bands at electronic platforms many brokerage companies. After all, the indicator in question is included in the set standard tools For technical analysis on many of them. We tested the strategy described below on the Olymp Trade trading platform.

As experience shows, the price of any investment asset will almost always move within the price channel formed by three Bollinger indicator lines. In those rare moments when it violates its boundaries, the trader will receive signals to open trading positions.

On the Olymp Trade brokerage platform, when this indicator is activated, the settings we need will already be set. The SMA period is 20 and the standard deviation is 2.0. You can set any color and line thickness. The main thing is that the indicator is displayed on a live quote chart comfortably for you.

As you can see in the attached screen, Bollinger Bands are formed by three lines. In the center is a regular moving average curve. In our example it is colored Blue colour. Above and below it, within a given standard deviation, there are two more lines, which form the price channel. In our example they are colored purple.

The strategy, which works based on signals from Bollinger Bands, is universal. You can use it on any timeframe convenient for you.

Existing nuances

Before we introduce you to trading strategies, there are a number of aspects that you need to consider when trading Bollinger Bands. Understanding these nuances can significantly improve a trader’s trading efficiency.

Remember, the price of the selected underlying asset in most situations tends to move within the price corridor formed by the indicator lines.

In a situation when serious unrest begins on the stock exchange, which is characterized by increased volatility (increased variability) of asset quotes, the extreme Bollinger bands tend to diverge. That is, the price channel is expanding. Often such changes are the harbingers of a powerful new trend.

On the contrary, when everything is calm on the stock exchange, the level of volatility of the investment asset decreases. Responding to a similar trend, the extreme Bollinger bands begin to converge. The price channel is narrowing. Often such changes are harbingers of the beginning of a sideways movement or flat.

How strategy #1 works

The trading system in question produces the best results on 15-minute timeframes. In this case, the expiration period of the purchased option is half an hour.

The trader needs to click on the Call button when the body of the bearish or red candle completely closes below the lower indicator line.

The trader needs to click on the Put button when the body of the bullish or green candle completely closes above the upper indicator line.

There are three points to pay attention to in this strategy.

1. A trading signal for us is the closing of a red candle below the lower line, and a green candle above the upper one. In no case is it the other way around.

2. The body of the candle must be above or below the Bollinger indicator line. The shadows may return to the price corridor. For us this is not important.

3. The expiration period for the concluded transaction must be twice as long as the timeframe displayed on the asset quote chart. If the timeframe is M15 or 15 minutes, then we buy an option on M30 or 30 minutes.

Also pay attention to the first entry point to the market, marked on the screenshot above. In this situation, there are 2 green or bullish candles left at the top of the price corridor. This means we can safely enter into two downward trades. As you can see, this decision it justified itself 100%. Both transactions were closed with a profit.

There are not too many such trading signals. However, when they arise, you can safely open trading positions. At the same time, you need to understand that there are no strategies that give a 100% successful result. This trading system has an efficiency of 80–85%, which is an excellent result.

How strategy #2 works

We understand that not every especially novice trader is ready to trade on M15 timeframes. Especially for such investors, we will consider a strategy with one-minute Japanese candlesticks. It should be remembered that the shorter time frames are set on the live chart, the more the risks increase.

For those who want to increase the size of their own deposit as quickly as possible, the Martingale principle should be introduced into this trading system. According to this principle, when we receive a loss on an open position, we increase the size of the next transaction by 2.5–3 times. This approach will allow us to cover losses in any case and always remain profitable. In other words, in case of unsuccessful transactions, we will sequentially increase the size of the bets: 1, 3, 7, 12 dollars and so on.

The principle of trading in accordance with this system is simple. The trader needs to wait for a situation in which three candles in a row close above or below the corresponding indicator line.

Now let's take a look specific situation on a live chart. As soon as the third bullish or green Japanese candlestick closes above the price corridor, we open a trade to reduce the quotes by clicking on the Put button.

As soon as the third bearish or red Japanese candlestick closes below the price corridor, we enter into a deal to increase the asset quotes by clicking on the Call button.

If you analyze the situation in the screenshot above, you will see that after three red candles there was another fourth, which also closed with a decrease in price. That is, a completed transaction for $1 brought us a loss.

However, it was here that we used the Martingale system and opened a repeat position for an increase of $3. As you can see, the next candle closed with a profit. Thus, we won back the money lost on the first binary option and received our income.

In this situation, the use of the Martingale principle is justified precisely because we rely on the Bollinger Band indicator in our trading strategy. As you already understand, the price cannot remain outside the price corridor for a long time, which means that the use of such a risky technique is more than justified.

Use Bollinger Bands, trade binary options and make a profit!

IN trading systems ah, many traders can find a specially selected set of indicators. Many of them were created by successful economists who, thanks to their developments, created their own hedge funds and became millionaires. One of the most famous - Bollinger bands or lines.

The indicator of this level is used, among other things, on Wall Street and is considered legendary. They complement candlestick analysis well, and thanks to the bands you don’t have to jump like a flea from an indicator (“turkey”, as traders jokingly call them) to another indicator, put 20 of them on the chart or buy worthless paid signals.

John Bollinger is one of the brightest representatives trading family. It is with his brainchild that beginners can start, who prefer to master the difficult art of trading with indicators.

Bollinger Bands are a popular trend and volatility indicator.

But before we get down to business, let's meet John himself.

John Bollinger (aka John A. Bollinger) is a legend financial market. And the patriarch is far from gray-haired - not even 60. John is the winner of many financial awards (I’m too lazy to even list them - dozens) and the author of the worldwide bestseller “Bollinger on Bollinger Bands,” which has been translated into 11 languages.

What's good about this book? This is not only a description of the operating principle of the indicator, but also a unique guide to trading any assets. And you know what I liked most about it? The fact that it is written in human language. Without zaum, without the dominance of mathematical terms and formulas.

It’s amazing - being a strong mathematician, John managed to describe the work of Bollinger Bands in such a way that even a 10th grader can understand them. Very in simple language, without a single formula.

In this article I will tell you everything you need to know about lines/stripes. But if you want to enjoy full version- download this book. You will not regret.

John has been engaged in technical analysis of financial assets since 1977, starting with completely antediluvian computers. Over time, he created his own system (Group Power), which allows him to identify trends in various industrial groups and sectors.

In 1996, John created equitytrader.com, the first technical analysis site in the United States, which still maintains its leadership position.

In general, he is a super-successful trader, owner of a number of companies, analyst and scientist. He has also chaired several industry financial organizations such as the International Federation of Technical Analysis (IFTA).

By the way, one of the most expensive champagnes in the world is called Bollinger. True, John has nothing to do with him (although who knows).

These lines of his are a real jewel in the world of binary options, Forex and finance in general. Therefore, you should get to know them right now.

Bollinger indicator: how it works

At its core, Bollinger Bands, also known as Bollinger Bands (waves, channels and even “bands”, as they call it) are an indicator that perfectly shows volatility. This funny word hides how much the price changes, how much it “sausages” according to the schedule.

For further reading of the article. Click on the button there Indicators(indicators) and select Bollinger Bands(Bollinger Bands).

It consists of only three lines, namely:

• simple moving average (20-day SMA, simple moving average), centered;
• top band: SMA 20+ (standard deviation x 2);
• bottom band: SMA 20 - (standard deviation x 2).

The basis of the calculations by which these bands are drawn is the so-called standard deviation (STD or standard deviation). It is calculated using a special formula, which, in essence, is not important to the trader, because all calculations are done automatically. So I don’t give the formula; whoever needs it will find it.

The Bollinger base is a corridor. Here it is, painted over gray in the photo above and made of three stripes. This is the essence of the indicator. And when the candle goes beyond the upper or lower limits corridor - therefore, this is where you need to look for trading opportunities.

In general, at its core, this is a typical oscillator. There are a great many of them, however, “Bolli”, as traders affectionately call it, is one of the most popular oscillators in the world.

The higher the volatility, the wider the Bollinger Bands. And on the contrary, when the price creeps up or down like a turtle (low volatility), the bands narrow.

Well, now let's look at specific examples.

Bollinger Trading: Basic Techniques

As we already understood, there are 3 Bollinger Bands. The central one is a simple moving average, set to 20 days by default. The other two lines are calculated using the standard deviation. But this is all lyrics, let's get to practice.

Narrowing and expansion

Bollinger Bands are an ideal indicator of volatility that cyclically contract or expand, demonstrating a wave-like price structure.

Let's look at the graph. After each narrowing of the channel, an expansion occurs - and the price moves sharply up or down. Therefore, after each “narrowing” it is quite logical to wait for expansion.

We wait until the channel is narrow and start trading after it begins to expand. Where will the price go during expansion?

Line punching or high/low prices

As a rule, candles on the chart are located inside the channel. It's good for them there. It just means that nothing interesting is happening. But as soon as the price approaches the upper or lower line, this is where the trading opportunity appears.

For example, if the candle crosses the lower line, therefore, the price may soon go up. And indeed, let's look at the graph:

Another example works exactly the same way - crossing the top line can mean an imminent fall.

However, remember: this will only work if there is no clear trend. If there is one, then the candlestick crossing the Bollinger line will only indicate that the trend will continue.

How can this be determined? This is called "strip walking."

Walk the strip

As we already understood, when a candle crosses the line, this is a good signal. But about what? That:

• the price movement will change;
• or the trend will continue.

If the trend continues, it is called a streak walk. Like this:

As you can see, when the candle touches or crosses the upper Bollinger Band, the price goes down for a very short time. Then she new strength pushes off and continues its upward movement.

Therefore, if there have already been several such touches - as in the example - the trend will continue, and each touch will only be its confirmation.

Here is exactly the same example for the downward price movement. As we can see, the candles are vigorously crossing the lower lines, however, the trend does not even think of changing - it is also going down.

It is not difficult to identify a strong trend - it will scream about itself throughout the chart. Moreover, every touch of the upper or lower line is the ideal time for a transaction.

Let's say the trend is going down and there is a touch? Wait for the price to bounce back a little to the middle line and sell.

How do you know when a trend will reverse? For this there is such a find as W- and M-shapes. John Bollinger found more than 45 such patterns, but their principle is, in general, very similar.

W shapes

Actually, W shapes first revealed by Arthur Merrill, another bright mind. Bollinger used his work to develop ideas for his indicator.

The W pattern is, simply put, the regular letter W that you should look for at the bottom of the chart. In this case, the first part of the letter may be higher than the second, although not necessarily.

Let's find the letter W at the bottom of the graph - it's highlighted in blue.

It's simple: the price goes down and touches the lower Bollinger band. Then it bounces up and crosses the midline. Then it goes down again, falls short of the lower band again, and a miracle happens - the trend completely changes and begins to rapidly go up.

And as soon as you see that the upward growth has crossed the price that was at the average jump, that means that’s it, the trend has changed.

Here are two more examples with our letter W, but on a different graph, for clarity:

All the same. We see the first touch of the bottom line, a rebound, the second fall, which does not reach the bottom line. Then growth begins, it goes through the price that was in the middle line and a strong rise begins.

The letters M are a slightly different story, although very similar.

M-shapes

Everything is the same here. Your task is to find the letter M at the top of the graph. In fact, we're talking about about the double top, from which it is easy to see our letter, like this:

By the way, pay attention that when the letter M is drawn on the upper chart, another indicator - MACD - shows something else - that the price will fall.

That is, MACD does not coincide with Bollinger Band. It is called divergence and indicates that the price movement will change very soon. We will talk more about the wonderful MACD in a separate article.

We see the first rise and intersection of the top line. Then there is a rebound downward, and an upturn again. Note that during the second rise the top does not cross the upper Bollinger Band. Then the second fall, the price falls below the price with an average rebound and voila - the entire chart has flown down.

And here is another example of our letter:

As you can see, the letter “M” is very skewed, but the principle is still the same:

• the price did not reach the top line;
• bounced down;
• rose again, but lower;
• went down again, broke through the previous value and finally decreased.

So the strategy is simple. Look for the letters W and M on the chart - they will help you find a change in trend.

The best strategy for Bollinger Bands

What trading strategy can you recommend?

Of course, you need to open the chart and just learn how to find all the elements that we have already described:

• punching a line;
• walking along the lane;
• letters W and M.

Often the strategy is to use bands with other indicators that complement it. Of these, two fit well, namely:

• MACD;
• price oscillator (price oscillator).

And stop putting 20 indicators on the chart. If the success of trading depended on the number of indicators, then we would all already be millionaires. But the reality, as you understand, is somewhat more complicated.

with Bollinger Bands, MACD and Price Oscillator

Bollinger + candlestick analysis + auxiliary indicator. But it will take practice, a lot of practice. Study the graph and find it necessary examples and in general – don’t be lazy.

Bollinger settings

In his book, John Bollinger advised not to touch the indicator settings without a good reason. And in fact, the indicator took almost 10 years to create. During its creation, tens of thousands of transactions were analyzed, so John had already done all the work for us.

However, no one is stopping you from delving into the settings to understand how the indicator works.

To open the Bollinger Bands settings, click on the gear icon. A window with three menus will appear.

Inputs menu

In this menu we see the following parameters:

• Length. Period. The default is 20, leave it that way.
• Source. What data from the candle is used. You can change it and see the difference (it’s tiny).
• StdDev (standard deviation). But this parameter can and should be changed. Set the values ​​to 3 or 4 and see how the graph changes.
• Offset. Bias relative to the market. I don't touch it.

Style menu

Here you can change the style of all three lines and the background. As a rule, I turn the thickness of the lines to the maximum using the slider so that they are better visible.

Well, you can change the background of the strip to a more pleasant color if it bothers you. There's nothing else to do here.

Properties Menu

This changes cosmetic properties, in particular whether the values ​​of the upper, middle and lower bands are displayed.

Nothing interesting.

Bollinger Bands in Binary Options

All the described tactics are fully applicable when trading binary options. Moreover, Bollinger Bands are generally considered one of the most effective indicators for binary trading.

The indicator shows itself the best way on 5 and 15 minute timeframes. You can also use it on a 1-minute one, however, be sure to compare the indicator indicators with larger timeframes.

We saw an opportunity at 1 minute, switched to 15 and 30 minutes, assessed the situation and returned back. This is also true when using other indicators.

As for me, Bollinger Bands are in my personal top 3. But this is not a magic loot button. Because other factors come into play, such as experience, volatility of pairs, the influence of news on them, and so on.

Learn Bollinger. In skillful hands, this is an absolutely stunning indicator, on the basis of which a bunch of trading systems are built. Over the time since its creation, it has only confirmed its authority and reliability. Thing. For those who understand this, of course.