Trading strategy for binary options “Breakdown RSI”
Traders go on creating new trading strategies with binary options. Moreover, the market itself likes it, because it is impossible not to notice some tendencies of price moving. The strategy is rather simple and works stably in any financial market, any timeframe, and it is applied to many kinds of options, it gives it the big advantage over other similar trading tactics.
Now, we will consider the strategy, which uses the peculiarities of chart building with indicator RSI (which measures index of market power).
To trade with this system, platform Meta Trader4 is necessary, you can get it at, this address. If you still can’t use this virtual trading device, read small article about the rules of using the terminal.
After you have installed the terminal in your PC, we open the chart of trading asset, where you plan to close deals in your web-terminal and set there the indicator RSI – Relative Strength Index, which measures the power of the market for chosen time frame and make in settings of this indicator the period 7, or use this pattern to the quotation chart.
Your trading space in MT4 will look like this.
As it has been mentioned above, the indicator RSI shows us the changes of market power on the chart of its own scale, makes its own supporting and resistance levels. But the breakdown in supporting or resistance level on the chart of indicator means the same as the breakdown of the support on the chart of price asset. In this case, we get almost 100% the signal on the indicator, and on the quotation chart such breakdown can be false.
Thus, breakdown RSI of its own supporting level means good price moving to the side of breakdown. Beside it, we - traders are very greedy and we won’t miss one more peculiarity of the indicator RSI, its ability to show divergence on the quotation chart, that is, discrepancy the indicator and price chart, after which rather strong price moving appears.
So, to identify the signal for purchase according to breakdown by indicator RSI of its own line of support, we need to draw a trend line through 2-3 local minimums of indicator line, in this way.
That is, the breakdown of this level automatically denotes the appearance of the signal for entering the purchases by binary option.
As it has been mentioned above, in chart and trade moving in breakdown of indicator levels, we will trade in breakdowns of lines in divergence, which appears in those places, when the indicators remains behind the quotation chart and in fact look like their mirror reflection. On the screen below the signal of divergence in RSI is depicted about the buying of price asset.
Thus, you see, that the line slope, which is drawn through the local minimums of the indicator RSI, doesn’t coincide with trend slope and tells us about divergence and about quotation moving of financial asset up. The Direction of price moving we identify according to the line slope of its support. That is, if the line is sloped from down to up we make a purchase.
To identify the signal for sale according to breakdown by indicator RSI of its own resistance line, you need to draw lines of indicator through 2-3 local maximums, in this way.
That is, the breakdown of this level automatically means the appearance of the signal for entering the sales with binary options.
Now let’s consider the signal for sale in divergence, which will appear on the quotation chart and indicator RSI.
After the divergence for purchase appeared on this price asset and indicator RSI, the quotations rushed to the enough distance down.
To trade with this strategy, you can use binary options, where the distance for getting the profit is not so important. That is, after breakdown, the price goes to the side of the breakdown, and we get practically guaranteed profit.
One-Touch options are available to use for us, because after the breakdown of the supporting line of indicator RSI, the quotation chart moves to enough distance to let us fix the profit in One-Touch option. The same is concerned the options Range and Below, where the condition of getting the profit is the breakdown by the price of given target-levels in the conditions of contracts.
Does your broker have such options? If no, you can exchange your brokerage company to the better one. In our rating of binary options brokers there are brokers with the most profitable options for your profitable and comfortable trading.
Trading with this system is applied to any time frames. In this article we demonstrated trading with signals on the chart D1, where every new candle appears 1 time a day and night. That is, after the appearance of the signal for buying or selling, it is necessary to have at least three days to reach target-levels of the contracts or going out of binary option into profit zone.
If you decided to put the pattern on timeframe H$, expiration time will be 12 hours.
Considering signals on timeframe H1, you must use in trading expiration time 3-4 hours.
Does your brokerage company give you such expiration time? If no, choose another one, the matter is that not brokerage company does the trading profitable, but trading system. If your broker doesn’t correlate all necessary demands for qualified and comfortable trading – it is high time to change your broker!
This trading system is very profitable. The exactness of its signals about profits is about 70%. But before you start trading with this system, test it using technology, which described in this article and trade it on demo-account to understand the specifics of this tactics and work of the indicator RSI. Doesn’t your brokerage company have demo-account? May be this broker waits till you drain your trading deposit as quickly as possible, trading without testing the systems on demo-account? Think about it seriously. Never start trading with the system, having not tested it on demo and never start trading with a broker, who waits your fiasco! Choose brokers with demo-account!
Options One-Touch and Range ñ Below, will give you more profit, because the percent of paying out with these options is about 400%, that lets you make from every 100$ in every profitable deal 400% of clear profit, that is 400$.
Use in trading maximum 3% from your own deposit. Let your deposit increase without slumps, which can be caused by saw-shaped trends and flat. If you keep rules of money management, temporal slumps will be compensated by summed profitability of the system.
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