The Best 5 Minute Strategy!

Thursday, June 5th, 2014 by Tim Lanoue

Finding a highly profitable quick term trading strategy can be difficult and sometimes hard to apply, fortunately for you guys today I am going to provide you with one that not only has a great success rate but also is pretty simple to use.  What you are going to need for this 5 minute strategy is access to a charting solution, access to your trading broker and a little bit of patience. Checkout the top 5 free charting solutions for binary options.

This 5 minute strategy only requires the use of one trading indicator and it is the Derivative Oscillator indicator.  This indicator is a trend generating and trend finding indicator that applies itself directly into the price action of our targeted assets.  The Derivative Oscillator is a unique technical analysis indicator solely because it uses the assets momentum to formulate and generate there signal output.


Before we can apply this indicator into our trading strategy we need to make sure that the time frame that we are watching our asset is set on 5 minutes, since this is a 5 minute strategy.  Any time frame watched outside this will affect the accuracy of the signals generated.  In addition, this indicator works best for high volume stocks and low volatility currency pairs.  Some of the more popular high volume stocks that would work great for this strategy would be Apple, Nike, Exxon and Amazon.  Low volatility currency pairs that we would want to trade with when using this strategy would be Eur/Usd, Usd/Chf, Nzd/Usd, and Usd/Cad.

Now that we have all the basics set up we can look into applying this indicator into a trading strategy.  In the picture below you can see an example of how this indicator would look when applied to our trading strategy.  If you look closely you can see how the derivative oscillator bars go in the same direction as the price action candles, or it will predict it and you can see how it changes and how the price also then follows suit.  We have three trading opportunities in this example and all three of them end up as winners.  In order for a trading signal to be generated we need to wait for one step to happen and one confirmation.  The one step would be that there is a change in direction in our derivative oscillator indicator.  Meaning that if there is a negative candle below the 0.00 value the next candle must be a positive candle, and vice versa.  The confirmation is if the candle forming above or directly next to our derivative oscillator is heading in the same direction as that candle, if it is then we are good to place a trade in that direction for an expiry time of 5 minutes.



This is a rather simple indicator and so far I have been experiencing around a 73% in-the-money success rate with it, I keep planning to researching and developing new strategies for you guys so just stay tuned in!  Best of luck, and if you have any questions or comments please feel free to leave them below!

82 thoughts on “The Best 5 Minute Strategy!”

  1. Thank you for this strategy. However, I am unable to see the screenshot. It does not appear (open) in either Google Chrome nor Firefox. I’ve noticed this several times when I’ve studied Tim’s strategies. Any advice on how to open the photo?

  2. Dear Mike,
    Please how can set the derivative Oscillator in MT4, as it is not in the list of MT4 indicators.What is the best platform to use Derivative Oscillator?

    1. There are quite a few derivative oscillator-based indicators that are not compatible with MetaTrader4 I have noticed unfortunately. When this occurs I would suggest just using which is a free, web-based charting solution and offers that indicator along with many other technical analysis based indicators. Who knows, you may even enjoy them more than MetaTrader4!

      Hope this helps!

  3. Hej guys.
    I love that your methods actually works.

    But i cant find the Derivative Oscillator indicator on and the pictures in this post showing the chart, wont work.
    This is an old post, maybe you need to give it a litle 2016 update 🙂 ?

  4. Hi Tim,
    Thanks for your contribution.

    As per your chart, the price gets more momentum after 2~3 candlestick periods. So while using 5 mins chart with derivative oscillator, should we set the binary options expiry for 5 minutes, or for 15~20 minutes after we detect the reversal signal.
    Your feedback will be highly appreciated.
    Thanks and Cheers,

  5. Hey Mauricio,

    Great question! Yes this also is an applicable Forex trading strategy. Low volatility currency pairs that we would want to trade with when using this strategy would be Eur/Usd, Usd/Chf, Nzd/Usd, and Usd/Cad. Make sure to stick to low volatility currency pairs when Forex investing and using this strategy!

    Tim Lanoue

  6. Hi Guys, great strategy it seems, I will soon start using it and tell you the results.
    Am I right in assuming that if I setup my chart for 1 Minute chart with Derivative Oscillator, then when I get a reversal signal I start a Binary options trade with 3~5 mins expiry. That on the chart will represent 3~5 bars(1Min) after reversal, that should be pretty safe area for win. On the other hand if it is 5 minutes chart and the trading is with 5 minutes expiry, that is the next bar only. Any feedback will be highly appreciated.

  7. Thanks for share this strategy with us for me is working great my question is could it be possible to implement with forex and how.

  8. Hey guys, thank’s for all the support! I’m backtesting here my results with 1, 2 and 3 minutes, because my broker doesn’t have the 5 minutes option. Sonn I’ll post my results. Thank’s again!

  9. Hey Nilo,

    Any technical indicator should be applicable to any charting solution therefore it should work in tangent with any trading platform. However, since this is strictly a 5 minute trading strategy you will have to tweak and customize the settings of the Derivative Oscillator to a longer time period since you would be amping up your time frame window. Hope this helps you out some!

    Tim Lanoue

  10. Hey Tim

    I like to ask you if this derivative oscillator will work with tradlogic platform of my broker with 15 min expiry time.


  11. Hey Mouad,

    They are kind if similar, I will be honest I don’t know that much about the Elliot Wave Oscillator. I know the DO runs off of old price levels that can be changed to different periods of time. If I were you and you really wanted to use this trading strategy I would branch out to MT4 or or maybe search to see if there is a free downloadable DO technical indicator for your charting solution.

    If you have any more questions you can email me if you want at:

    Thanks for your time!


  12. Hi Mike/Tim,

    is the Elliot wave oscilator similar to the derivative oscillator. i use Netdania and i can’t find DO in the studies menu.

    thank you both.

  13. Hey Jane,

    Great question and also by the way great results! If you were really trying to change this to a one minute trading strategy then I would recommend that you toggle with the settings some, it get really difficult to predict with an oscillator technical indicator what settings you should use if less than 5 minutes. If I were you though I would slowly tweak them and then add a SMA line with a period of like 3,5, or 6 to that charting solution to act as a signal generating line. Hope this kind of helps out out!

    Best of luck!


  14. Hi! Thanks for this strategy! I tested it today on 1 min chart and 8/11 wins, so 73% ITM. You did mention that some of the setting would have to be adjusted for different time frames, so curious what settings you would recommend for 1 min for this indicator? Thanks so much!!

  15. Hey Dat,

    I don’t use the Stochastic technical indicator for a 5 minute trading strategy. Those are settings that you have to play with, make sure to use that indicator during the New York or Asia trading hours and make sure it is not a day before or closing of the weekend.


  16. Hi Tim,

    Appreciate the advice, since we’re on the subject, what settings would you place on the stochastic indicator for the 5min strategy? Currently I have it set on 15,5,5 and a ITM of 60% which is not the best ITM at the moment.



  17. Hey Dat,

    The recommended period settings that I have for this strategy are 14 5 3 9. I highly recommend using these settings when using this 5 minute trading strategy!

    Hope this helps you out!


  18. I have been using the DO along with an 8 period EMA and it works well. The DO may do a slight change of diection but the 8 period EMA keeps you in the trade.When both agree,then go in the direction both point.

  19. Hey Sehan,

    Go to and you can find any of the indicators that I use in my articles for free to use! All you have to do is click on Add Indicator, Scroll Down, Find It, Select It and It Adds To Your Chart Automatically.

    Hope this helps you out!


  20. Hi guys…
    is the Derivative Oscillator the same as the awesome Oscillator that is available on

    they don’t have a derivative oscillator


  21. Hi,

    I am able to program and backtest binary option strategies on the last year. Then I can study the results according to months in the year, days in the week and hours in the days. By applying this strategy as it is decribed, it is in any way not profitable in the long term (for EUR/USD, USD/JPY, XAU/USD …).

    To get a idea, by following the rules, the results remain close to this example :
    EURUSD,M5: TotalBar=65005
    Win=1050 Loss=1170 Tie=408 W/L=0.4728

    A backtest over only several weeks is inadequate because it can be very profitable.

    I am open to suggestions.

    Have a nice day !

  22. Hey Tim and Mike,

    Great strategy! I have been testing it and it has a very high ITM rate for me. I have one quick question, Mike said in the comments that Titan Trade has the 5 min trade option. Where can i find the 5 min option on Titan Trade.

    Thanks again, love your work.
    Joel Walters

  23. Hey vincent,

    How are you doing today? Depending on the type of news to be honest, let’s say Apple is releasing a new product or the United States Government is talking about lowering the price of oil, that means more Apple stocks will be bought and if oil prices are dropping then the dollar value will slightly as well which will effect most currency pairs! It all depends on the type of news to be honest!

    Hope this helped you out!


  24. If I were you I would only place trades during the New York market hours with a limit of 1-6 trades per trading day. That way you make sure that you are not overtrading, which is one of the biggest problems made by novice traders.

    Hope this helps!


  25. Hey,

    Sehan: When trying to add an indicator on make sure you go right night to the asset. Select on add indicator, scroll down until you see the indicator and just double click it to add it to the chart!

    Vincent: I would suggest using 5-7% on your trading account when it comes to money management with any strategy.


  26. I have been using the oscillator combined with another indicator I found with keltner channels and a change of trend indicator I found, and I am having very good success (over 85% win rate). I just have to handle the psychology and mindset. I still get too emoptional so I have to walk away and take it a little slow. But feel very good.

  27. Hey Ishmeal,

    If I were you I would highly recommend using this trading strategy during the early hours of the New York trading session. I hope this helped, have a great day! 😀

  28. do you have a preferred time for tradin this strategy? day time or night time after trading hours or doesn’t matter? thanks.

  29. The reason I ask the above question is that I would like to verify the signals received from optionbot2.0 ….I can use the 5 minute strategy you have just described for 5 min expiry…but for 10min and 15 minutes…should i just change the time indicator on the chart for this derivative oscillator strategy to 10 min and 15 mins or is there some other technical analysis I could be doing to verify optionbot’s signal. Thanks.

    1. It works but you have to log in to YouTube to watch this specific video..for some odd reason someone flagged it as scam..even though I was only talking about free charting solution.. It’s really odd, probably some broker or someone who really hates me.. but anyway, the link should work but make sure you’re logged in to YouTube. Cheers! Mike

  30. Hey,

    Mark: I like to use this strategy during the New York trading hour session. It is just the most convenient for me then and the markets are strong during that trading session.

    Wilson: By definitive I mean that is looks absolutely certain that the trend will reverse and continue to go in the opposite direction. If you want to wait for a confirmational second candle you can, however, it is not necessary, once you see the reversal take place on the D.O. and then you are good to go!

    Hope this helped answer your questions!

    Thanks guys!


  31. hello Tim,what do you mean by it being definitive.If I am correct what you are saying is that we do not trigger a trade at first candle bar of the oscillator, we wait for the second bar before taking a trade. Am I correct?

  32. Does this is available for tos?
    And do I wait for candle close or just trade on the exact moment I see both in the same direction? Thanks

  33. Thank you very much for answering my questions Tim. You’re answers help me out a lot.

    I am already profiting about 75% with this strategy so I am very gratefull for sharing this (and other) strategies. Definitly keep up the good work!

    Have a great weekend and thank you once again!


  34. Hey Bram,

    1) I would wait to make sure the bar is definitive Bram, that way it acts as a confirmation for you so that you know that more than likely the reversal is true and the asset will continue in the changed direction. Great question, thank you for asking it!

    2) I do not believe that you can set price alerts for when the D.O. changes from negative to positive or positive to negative. That would be great if so but the D.O. formula itself is kind of complicated and being able to manipulate it into a formula that can create price alerts from negative to positive I feel like would be difficult. If you are stuck on the idea of having an alarm set I would wait until you have a couple consecutive candles formed and then set a predicted price level for the charting solution to alarm you at if price was to break this level. When you are setting this predicted level though I would have it set in the opposite direction, not heading the same way as the trend. Because this is a reversal oriented strategy here, so we are trying to predict when it was reverse. That is just my recommendation, great questions and thank you for asking them! I hope this helped you out!

    Have a great day!


  35. Hey Tim,

    Thank you for this wonderfull method. I’ve got two questions for you, I hope you can help me out.

    1) When a bar from the Oscillator it’s changing it’s course (up or down) do I have to enter the trade once the first bar (the first one that create’s the change in direction) is still forming or should I wait until this bar is completed and the second bar is going to start? In other words, do I have to wait until the direction is definitive?

    2) In the freestockcharts website-programme, is there a way to set-up an alarm that notifies me when the Oscillator is changing it’s course? I can only find alarms for price notifications. And in the premium service you can set-up an alarm for a condition but I don’t know if there is one in the list for this purpose and I’ve got no idea how to write a formula in the programme that suits my needs.

    I hope you understand my English since I am from the Netherlands.

    Bram Lodewijk.

  36. Hey Wilson,

    If the Derivative Oscillator candle is crossing above the level 0.00 and the candle above it of the price action candle is heading in the same direction they we place a call trade since both candles are moving up. If the DO candle is crossing below the level 0.00 and the price candles above are heading in a downward direction then we place a put call. Basically you wait for a cross to occur in the Derivative Oscillator, meaning that if the DO candles are below 0.00 and cross above 0.00 that is a cross and vice versa.

    I hoped this helped you out and best of luck!


  37. hello, pls can you explain what you mean by negative and positive candle. I realy do not get the drill on the conditions to trigger the trades.

    1. Hi Jan, for this particular indicator I would recommend using, let me know if you need help setting the Oscillator on the chart, I’ll walk you though it. Cheers! Mike

  38. Hi Mike,
    I am fairly new to Binary – would like to start making some profitable trades on a small scale and increase things gradually to give me a chance to learn and understand all this stuff – without necessarily having to get a software or robot (I have done this when I started and they were useless and lost me all my money) brokers were not too good either. Any tips, advice would be most welcome. Best – Sherret

    1. Hi Sherret, Welcome to the world of binary options and thank you for visiting my blog! There is nothing more gratifying than making it on your own! Since most of the robots are signals services ‘under-perform’ below their clients expectations and a photoshopped “proven performance”, your decision is not riskier than to signup with most services but if it ever comes down to it and you do find that professional signals/software is something you want to get into, I will be glad to recommend some good ones! Since you’re taking the ‘Self-Made Trader’ route you have to dedicate a lot of time into research, be patient and practice a lot before using real money. Here is a link to a Free Demo Account hosted by Spot Option, a binary options technology provider. I also encourage you to checkout some of my recent strategy videos on YouTube and you can start with my Binary Options Strategies – tutorial video, on how to make use of my strategies, free online tools and the technical analysis widget in order to generate free short-term signals. These signals are based on a combined assessment of multiple indicators and moving averages, automatically providing you their BUY/SELL (CALL/PUT) signals via this widget and you can see how many indicators point you to SELL and how many indicators point you to Buy and again, in reference to binary options we’re talking about PUT and CALL. I also posted this article on Important Facts and Tips for Binary Options and I encourage you to check it out as well. If you run into any questions, I am available at Enjoy your weeked and good luck! Mike

  39. Hey Guys,

    Oleg: Thank you for the suggestion, please keep us posted if this continues to look like a good second strategy as well!

    Sehan: Hey thank you very much Sehan! I try my best to help you guys succeed and it is always extremely rewarding knowing that I can help others reach their goals and dreams.

    Bertus: Ideally, the Derivative Oscillator can work on any type of expiry time…. however, it would require some tweaking of the time frame that you are watching along with the averages and periods used with the Derivative Oscillator.

    Hope this helps guys, thanks again for all your feedback also!


  40. By the way traders, a checked friday’s 08/08/2014 USD/CHF 1 min chart, seems to work quite good for this chart also, but please check it for yourself, so this could be a good ’60 second’ strategy…

  41. hi i tried finding Derivative Oscillator but i could not able to find it where i can use it with charts. please help. I am very keen to learn the way of doing binary trading in past i have lost quite enough money and after reading your strategies i see some hope. I need help….

  42. Does anyone know which Broker platform offers the 5 minute trading . I’m in Canada so my options maybe limited compared to people in Europe.

  43. Hey Correy,

    When using this trading strategy I like to trade once the oscillator changes directions, you can wait for a confirmation candle to form to verify that the trend is trading however I usually just enter the trade after the reversal is made. Hope this helped you out!


  44. Hi, Can someone clarify the setup. Once the oscillator changes direction do we trade then or do we wait for the next 5-min candle?


  45. Hi guys GREAT JOB best website around ,I was wondering when a strategy is applied to let’s say 5 currency pairs and lets say the strategy has a 75% win rate,is it per currency pair or can I see a 75% win rate on all 5 currency pairs. For example lets say I made 10 trades using the one strategy but a couple of trades per currency pair. I hope I made sense and keep up the great work guys.

  46. Hi Michael’
    Quality stuff man ! Now i have searched on the MT4 library of indicators and can’t find the Derivative Oscillator indicator. I’m i missing something ?


  47. It would be great if MT4 had this oscilator, I tried to look for it a little, but it seems like it is nowhere on popular pages. Anybody has it for MT4 ??

  48. Hi Mike,
    I’m interested to binary trade, however, i do not have any experience on this industry. While I’m doing some research, I come across to your site which is very informative site.
    I need some advises and if possible can I have your private email or skype room ID, so I can get more information.

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