# Binary options. Stochastic – the way to success. The strategy «Two snakes»

## Strategy characteristics

Stochastic Oscillator – is one of the most interesting technical indicators, which is in many web-terminals for binary options trading. What’s the secret of its popularity? This indicator shows the moods of financial asset faster. They say, that indicators are late in their indices, but this statement is almost never referred to “stoch”, as it is called by professional traders.

Let’s consider profitable trading strategy, which is created on one indicator Stochastic Oscillator.

## TRADING RULES

For trading strategy, it is necessary for you to open quotations chart, chosen by you financial asset on time frame (timeframe) H4 or D1 and apply the indicator “stoch” to it with parameters: 21, 9, 9, which will do its main function, and also “stoch” with parameters 9, 3, 3, which will be auxiliary in making a decision to close a deal.

For disposition of the given indicators on quotations chart, you can use real chart for binary option, which is on your Internet-resource or download and install on your personal computer trading platform MT4 from Grand Capital company.

After installation of stochastic oscillators on your terminal, your chart of quotations will have this form.

**Binary options. Stochastic dictates the conditions for buying:**

It is necessary to make purchases, when both indicators go down in the zone of reselling, that is, lower from the level 30 on your scale, after that, on both indicators, fast line stochastic crosses slow line stochastic in direction from down to up. After it, we wait when price candle, where the signal appeared, closes and enter the purchases: Call-option.

**Binary options. Stochastic dictates the conditions for selling:**

It is necessary to enter the selling, when both indicators go down in the zone of rebuying, that is higher from level 70 on your scale, after it on both indicators, fast line of stochastic crosses slow line stochastic in direction from up to down. After it, we wait, when price candle, where the signal appeared, closes and enter the purchases: Put-option.

As you see on screens, all given by stochastic signals to buy or to sell were worked out for 100%. More than that, in big expiration terms, binary options have high levels of paying out – more than 100%, it makes our trading system more profitable.

## APPROPRIATE OPTIONS

For trading by this trading strategy, you can use classical kinds of binary option, without fixed strike-levels.

OUT-Range options, and also ONE-Touch options, the price on quotations chart reaches their strike –levels without any problems.

## EXPIRATION TERMS

According to history test, in strategy test MT4, and also rather long trading on real account, the system showed rather good profitability. Signals, which were shown by stochastic, in most cases, to be more precise, in 79% of cases, were profitable. But the expiration term for time frame of quotations chart was sold for 12 hours. For this time, the price could decline in prognosed side, that gave stable profit.

## PROFITABILITY OF STRATEGY

Binary options with 12 hours expiration terms have the percent of paying out about 150%-200%, that more than positively influences on the profitability of the trading system on stochastic. Thus, profit factor has constant stable indicator, but the correlation of profitable deals to losses is not less than 3:1. That is, 3 profitable deals and 1 loss, but if you have profitable options, about 150%, it lets you earn rather big profit.

## MONEYMANAGEMENT

We don’t forget about the main demands of money management. That is, we use in a deal only 2% from the deposit size. For example, your deposit is 1000 USD; it means that in a deal you can use only 20 USD. But if you want to exclude loss deals from trading and increase the profitability of the system, you can use Martingale method that is to double the size of a deal after the loss. Taking into account that the percent of working out of trading signals is rather high, you can make trading operations without any danger, not being afraid of “draining” your own deposit. However, to do it, you must enter the market with minimal volume of deals, which are allowable.

Strategies rating | Brokers rating |