Binary Options Strategy: Balanced System %75 plus ITM

By | February 5, 2014

Wednesday, February 5th, 2014 by Tim Lanoue

Trading online with binary options can be one of the most beneficial life decisions that one can make.  However, many people new to the industry have little knowledge or have conducted enough research necessary to profit through binary options.  Luckily for you the purpose of today’s article is to provide a high accuracy binary options strategy that can be used by traders of any experience level.  Moving forward we will cover the basics of the indicators needed and how to implement them into this balanced system trading strategy.

The first indicator that we need for this binary options strategy would be two exponential moving averages set at a period of 5 and 10.  Exponential moving averages are indicators that display the average price of an asset set over a predetermined period of time.  Oftentimes these indicators are used with trend trading and play a primitive role in the signal process of this strategy.

The second indicator we use would be the relative strength index, also known as the RSI indicator.  The RSI indicator is commonly categorized as an oscillator type of indicator because the indicator oscillates between the values of 0.00 and 100.00.  However, the more important values to pay attention too would be the 30.00 level and 70.00 level, these levels will tell us the condition that the asset is currently exhibiting.  If the RSI value is near the level 70.00 it tells us that the asset is currently being overbought and will more than likely drop.  However, if the RSI value is near the level 30.00 it tell us that our targeted asset is oversold and a price rise may occur.

The last indicator that we use in the signal process would be the stochastic indicator.  This is also known as an oscillator type of indicator because it reflects between values of 0.00 to 100.00.  The stochastic indicator is quite similar to the RSI indicator not only because it is an oscillator classified indicator but it also determines whether or not an asset is overbought or oversold.  If the value reflected on the stochastic chart is near 80.00 then the asset is thought of as overbought however if the value is near the level 20.00 then it is known as oversold.

Although this strategy may seem complex due to the variety of indicators needed it is relatively simple due to the simplicity of these indicators and the signal process.  In the picture below you can see how we use these indicators to spot a call trading signal.  In order to place a call trade we need to wait for three occurrences to take place.  The first step that needs to happen is for our ema 5 line to cross our ema 10 line in an upward direction.  The second thing we need to make sure is that our RSI indicator is valued above 50.00 and the last would be that our stochastic indicator is heading upward but not over the 80.00 level range.  If all three of these conditions are met then we can place a call trade, however if not all three are met then no trade should be placed.

Similar conditions must be met in order for a put trade to be placed when using this strategy.  The first step that must occur is that our ema 5 must cross our ema 10 line in a downward direction.  The second condition that must be met is that our RSI value must be below 50.00 so it acts as a confirmation that the asset’s price will go downward.  The last condition to be met is that our stochastic line must be heading downwards but not within the 20.00 level.

Although this strategy may seem like it has a lot of indicators involved the setup and implementation of this strategy is pretty simple.  The signals generated by this strategy when all three conditions are met are strong and when used properly can yield win percentages consisting of 75% or higher. For more information on indications and instructions visit the Indicators & Charts Page!

EXTRA: Checkout this Binary Options Strategy review on YouTube!

9 thoughts on “Binary Options Strategy: Balanced System %75 plus ITM

  1. Tim Lanoue

    Hey Yoz,

    You’re welcome my friend!
    Yes you are absolutely correct there my friend! 😀

    If you have any more questions you know where to ask! Best of luck and take care!

    Reply
  2. yoz

    Thank you for this great strategy!
    I just want to be sure, that i have to use the stocastic with (12,3,3) It’s right?

    Reply
  3. Tim Lanoue

    Hey,

    Great question. If you are using Free Stock Charts as your charting solution of choice it really is quite simple to be honest. Just hoover your mouse of the %D5, left-click on your mouse, and select Remove which is at the bottom of the little pop up menu that will come up. Expire times regarding this trading strategy should consist between a time frame between 10 to 15 minutes. Hope you enjoyed the article and best of luck investing my friend!

    Reply
  4. venkateswarlu n

    Hi Tim,when I try to setup stoc indicator it shows only 12%k3%d5..how remove %D5 as shown in figure.And what is the expire time for this strategy.Thanking you.

    Reply
  5. Tim Lanoue

    Hey Anil,

    Thanks for your constructive feedback, it is dearly noted. Just so you know though all the candles are 15 minute candles since the timeframe is set to a period of 15 minutes. There are no 5 minute candles in this trading strategy, only 15 minute candlesticks. The 5 EMA and 10 EMA also are just the technical indicators responsible for the signaling process. Thanks again and I hope you have a profitable trading week!

    Reply
  6. anil

    great article,but one small request when mentioning the candels pls mention the 5min,15min,candles since the monentum can not be same for 5ema and 10ema….especially its for binary option.

    thank you once again a great one

    Reply
  7. Mcmillan

    Great article! Well written and well explained, thanks very much!

    Reply
  8. Tim Lanoue

    Hey Craig,

    The ideal settings when using this strategy for the RSI indicator would be to set the period to 50, it is preset in the indicator already on http://www.freestockcharts.com and MT4 so if you use any of those charting solutions you won’t have to change anything within the indicator settings. Please let me know if you have any other questions!

    Thank you for your time!

    Sincerely,

    Tim Lanoue

    Reply
  9. craig l

    hey Tim just doin some research on indicators in the RSI statedgy by Sjay he says to set the RSI to 3 periods and on another 1 he says 14,what should i set the RSI period to on the balanced system,any info would be appreciated
    cheers craig l

    Reply

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