If you use an automatic system (such as MT2 autotrading for example) you need a VPS (Virtual Private Server) so your autotrading will always be active, even when the computer is off
Metatrader and autotrading software always working with VPS
Choose the service
First you need to choose a service and subscribe. The supplier will issue you the connection data to be reported during the installation.
Best VPS Hosting Providers (Really Free):
Amazon Web Services (AWS) Hosting
The mstsc.exe program
This program is already on your computer you can find it with the search function, it is part of the functions already available on your Windows. You have to start it and once installed it will ask you for the data to connect to the remote desktop , the ones provided by the VPS service. In the “Computer:” box enter the IP address and in the “Username:” box the name (data provided by the VPS service):
Wait a few moments for the connection to take place:
After a few moments your desktop will appear, exactly like a virtual computer, on which you can install the MT4 and the autotrading software:
Your virtual desktop at work
When you close the remote desktop the VPS (possibly with autotrading) will always remain active:
When you want to reconnect, just click on the icon that is always present on your desktop:
Now your autotrading robot will always be running, and if you have finished your work session, you can turn off your computer, knowing that the VPS will work on your behalf.
The idea of the Martingale strategy is to counteract the losses caused by lost trades. In standard Martingale, if you lose a trade, you re-enter with a greater trade amount, so that over time, a winning trade will compensate all the previous losses. This new trade amount is equivalent to the amount of the lost trade multiplied by a Martingale coefficient. It should be noted that Martingale strategy can be risky, so you will have to be very careful when setting it up.
Configuration from the MetaTrader Auto Connector and Manual Connector
The Martingale section is composed of three parameters By default, the martingale strategy is turned off.
It’s time to choose which type of Martingale you are going to use. If you open the menu where by default “No Martingale” is selected, you’ll get seven different Martingale options to choose.
First of all, you must distinguish two different strategy types: Martingale and Anti-Martingale.
Martingale: This is the standard Martingale strategy. It applies to lost trades. Once you lose an operation, a new trade will be opened with a greater trade amount (equivalent to the lost trade amount multiplied by a martingale coefficient)
Anti-Martingale: Unlike the standard Martingale, the strategy applies to the won trades. If you win an operation, a new trade will be opened with a greater trade amount.
NOTE: It is suggested that for Anti-Martingale, the coefficient is less than one. Otherwise, you would lose what you’ve gained.
Once you have decided the Martingale strategy to use, it’s time to decide when to apply it.
There are two possible options:
“On next expiry”: Martingale will be applied immediately after the current trade closes on the same currency pair.
“On next signal”: Martingale will be applied on the next signal. You can either choose to apply it on the same currency pair or any.
If you choose to execute Martingale “On next signal”, you will find that there are two possible options:
“On next signal (Connector)”: Martingale will only be applied on the next signal of the same currency pair.
For example: If you lose a USDCHF trade and our Martingale is configured on ‘Connector’, it will be applied only when a USDCHF signal comes.
“On next signal (Terminal)”: If you choose this option, Martingale will be applied on the next signal of any of the pairs configured on ‘Terminal’.
For example: Suppose you’ve configured USDCHF, EURUSD & AUDUSD pairs on ‘Terminal’, and lose a trade in one of these pairs. Martingale will be applied on the next received signal from any of the pairs configured on ‘Terminal’ (in this example USDCHF, EURUSD & AUDUSD). If you lose a EURUSD trade, the Martingale step can be executed only in USDCHF, EURUSD or AUDUSD.
B. Martingale steps
This parameter defines the number of Martingale steps. If you lose a trade, the first Martingale step will be applied. It will multiply the previous trade amount by the chosen coefficient. In case you lose the first Martingale step, the second step will be applied. If you keep losing, it will keep applying the Martingale strategy until reaching the maximum number of steps you’ve set. If the last step is reached and the trade is lost, the Martingale step counter will reset to zero.
You can use as many steps as you wish, but remember that the greater the number of steps, the greater the risk.
C. Martingale coefficient
This is the number that will multiply your trade amount on each Martingale step. For each new Martingale step executed, a new trade amount will be calculated (previous step trade amount multiplied by the chosen coefficient)
In the example above, if the trade with an amount of $2 USD results in loss and your Martingale coefficient is 2, it will multiply $2 USD x 2 and the next step of Martingale will be $4 USD.
Override signal provider’s Martingale Strategy
What can I do if my Copytrading provider’s Martingale strategy does not convince me? Just override your providers settings and configure your own
This window will be automatically opened when you send a subscription request to a signal provider.
Once in this window, just follow these steps:
Check “Override provider’s Martingale settings”.
Define and set the number of Martingale steps.
Set the Martingale coefficient.
In case you want to deactivate the provider’s Martingale, check the “No Martingale” option.
Fixed Martingale for MetaTrader signals
From the “Configuration” section of MT2 you’ll be able to customize the amount of each Martingale step, without having to use always the same coefficient.
Inside the ‘Configuration’ section we are allowed to set different Martingale coefficients for each step.
Check the ‘Amount’ parameter, where we will adjust the trade amount without Martingale.
The ‘Fixed Martingale’ option will be automatically activated. Set the fixed amount of each of the 7 steps of Martingale to personal need.
Note: In the compressed folder of the free MT2 download you will also find the Alpari Metatrader 4 or 5 installation file, which we recommend as it is immediate and easy to install. (suggested MT4 because there is more choice of indicators)
Note: In the compressed folder of the free download you will also find the Alpari Metatrader installation file, which we recommend as it is immediate and easy to install
Alpari and GCOption (Grand Capital) have the Metatrader for download on their site.Recommended Metatrader4 because it accepts more choice of indicators.
Automate your trading
Set up a trading robot to auto-trade for you
1. Automate your MetaTrader 4/5 arrow indicator signals
Connecting your MetaTrader 4/5 technical indicators with your favorite broker in order to automate technical indicators signals or to trade manually directly on graphics.
The auto-signals connector acts as a bridge between MetaTrader 4/5 and MT2 Trading Platform.
It will send your MetaTrader indicator/s signals to the trading robot, which will automatically open the trades in your broker/s account/s.
There are currently two versions of the signal connector.
In our update 12.3 we launched our new connector, with an improved interface and simpler configuration. Due to the requests of some users, the old version is also available for everyone to use. In this documentation we will explain in full detail how to configure and use both connectors.
Copy the connector file ‘MT2Trading_Auto.ex4 /ex5’.
Paste the file into MetaTrader folders. To do this go to: ‘File > Open Data Folder > MQL4/MQL5 > Indicators’.
Secondly, you must do the same with the Libraries files.
Localize the library file “mt2trading_library.ex4/ex5” inside the folder: “MT2Trading -MetaTrader > MT4/MT5 > MQL4 / MQL5 > Libraries”.
Copy the library file“mt2trading_library.ex4/ex5″”.
Paste on MetaTrader, to do so go to: “File > Open Data Folder > MQL4 / MQL5 > Libraries”.
How to open it on MetaTrader?
Once you have the connector file inside your MetaTrader folders, proceed to open it on a chart.
Open a new chart and choose your desired timeframe.
Open the browser: Pressing CTRL + N.
Drag your signals indicator/template to the chart (in case you don’t have an indicator, we include inside the MT2 download files the “BinaryProfit” indicator as a courtesy.”
Drag the connector file “MT2Trading_Auto” to the chart.
1. Indicator name
The name of the indicator is used to identify where the signals that will be placed in your account come from and to show their names on the trades table on MT2 Trading platform. The statistics and the historical data are also based and ordered according to the names of the signals you trade with.
Once you drag the connector to your chart with an indicator, you just have to click on the little arrow on the side and all the indicators on your charts will appear there.
2. Up # (signal buffer)
Every MetaTrader indicator that generates signals in the form of arrows, points or other graphic signs, transmits the signal data in the so-called indicator buffers.
Once the connector identifies the signal indicator, it will automatically read the arrows or points of it and give you the option of configuring the buffers for the robot to place CALL or PUT trades for you.
In the “Up” buffer you must select which graphic resource is the one that will indicate to the robot to open a CALL trade in your account.
3. Down # (signal buffer)
Contraty to the UP buffer, the “Down” buffer will be responsible for identifying the signal from your indicator on your graph and open PUT trades for you in your account.
4. Entry Type
Once you have configured the signal buffers, you can choose between two types of entries: OnNewBar or Intrabar.
On the new bar entry, the trade will be carried out at the end of the candle in which the robot received the signal (that is, at the opening of the new bar).
On the intrabar entry, the trade must be opened immediately when the signal appears.
Most reverse indicators generate signals to enter on the new bar, while trend indicators commonly generate signals for the intrabar entry.
5. Trading Amount
This parameter allows you to set the amount of money invested on each trade.
In the example, we can see that the amount is “1.0” which means that each trade that the robot opens will be of $1 USD.
If you wanted to change the amount of each operation, you should just modify this parameter.
For example: For $5 USD, you should write “5.0”. For $ 10 USD you should write “10.0”, and so on…
6. Expiry Time
This parameter will alow you to set the temporality of your trades.
In the example, the expiration is set to “5”.
This means that every operation the robot opens will automatically close 5 minutes after.
If you would like major or minor temporalities, just modify this number.
By default the Martingale strategy is disabled.
To activate it open the menu where it says “No Martingale” and choose your preferred option.
If you would like to learn all about Martingale Strategy, click here
Finally, you must decide in which broker/s you want your trading robot to be placing trades for you.
By default, “All” is selected, meaning all the trades will be placed in all the brokers (as long as it has accounts of those brokers opened in MT2 Trading).
To modify this parameter and choose your broker you should follow the next steps:
Within MetaTrader, go to the top-right menu and click ““Charts > Indicators List > MT2trading_auto”> Edit”.
Click on “Inputs > Select broker > click on the small arrow facing down on the right”
To temporarily stop the connector, you just can click on the “Pause” button and your robot will stop trading.
To have it up and trading again, you just need to click on the “Start” button again and your robot will continue trading.
2. Trade manually on your MetaTrader 4/5 live market charts
Place trades manually on your MetaTrader 4/5 trading charts by clicking on ‘Call’ and ‘Put’ buttons.
Create a bridge between your favorite broker and your MetaTrader 4/5 platform in order to automate technical indicators signals or to trade manually directly on graphics.
The best deadline of the trade: which one do we choose with binary options?
The best expiry in binary options. The trader who fails to predict the direction of prices at expiration risks losing the invested capital .
The best expiry in binary options
Let’s say right away that there is no precise best expiry for binary options.
This can only be indicative , and the rule applies to any strategy where the deadline is not clearly specified.
Despite this, let’s see how to identify an acceptable deadline for our entry into the trade.
It is useless to have a valid strategy if the operation is then lost on the basis of a wrong choice of expiration.
The Best Deadline and the Time Frame are linked together.
The Time Frame indicates the duration of a candlestick in the price trend chart. M1 one-minute candles, M15 15-minute candles, etc.
The graphs look different depending on the time frame and an initial indication of expiry can be established based on the aspect of the graph .
Operating on M1 , for example, we certainly cannot choose a one-hour expiry, given the unpredictability of price trends in the short term.
Rule 1. Choice of time frame
The best expiration depends on the type of time frame, usually 5-6 times the time frame , i.e. a development of 5-6 candles.
This is an assessment that is based on experience and is valid for most cases where a precise deadline is not specified.
With M1 the best deadline will be around 5 minutes.
M5 about 30 minutes.
M15 about 1 hour – 1 hour and a half.
It can be seen that using high time frames the expiration distances itself over time.
Some traders prefer to be able to make several daily , or even hourly (scalping) entries; for this reason, sometimes low TFs are often used, from 1 to 15 minutes, even if it is known that higher time frames give greater guarantees.
However, larger time frames must be kept in mind. Not for deadlines (if we are operating on low times) but for checking the trend and the entry signal.
In fact, strategies often also refer to the observation of higher time frames.
Rule 2. Evaluation of swings
Another approach is based on the distance between a maximum and a minimum , i.e. between an upper and lower peak of a swing (oscillation). The consideration to be made is this:
Observing a graph, you always notice price fluctuations .
What seems like a continuous push in a certain direction then turns into a reverse process.
Since a strategy is often based on technical considerations which foresee a change of direction at a certain moment , we should know how long this reversal will last, and we cannot know it precisely.
So we need to take a cue from what has happened during the most recent price movements .
Expiration based on fluctuations
Are we able to estimate how long the price swings last on average?
We measure the time between a maximum and a contiguous minimum , or between a minimum and a maximum, identifying the main and most significant ones. This is basically equivalent to counting candles.
Is there a range of around 10 candles on M5?
Then the expiry will be around 45-50 minutes (10 candles x 5 minutes = 50 minutes), or as close as the broker allows.
On M1 a range of 15 candles?
Then the deadline is 15 minutes (but never less than 5 minutes).
On M30 a range of 6 candles? Expiration 180 minutes 3 hours, if provided by the broker, or the closest.
As can be seen from the graphs there is sometimes a foreseeable short-term fluctuation .
Assuming to enter a maximum or a minimum, the duration of the fluctuations gives an approximate but sufficient indication to make an expiry decision.
The expiration in binary options therefore depends on the time frame and the duration of the recent price swings.
In the event that it is not possible to determine a more or less repetitive swing, it is necessary to refer to Rule 1.
It should also be noted that this visual system can also be used to enter a trade , however the moment of purchase of an option depends on the signal given to us by our strategy, the moment of the entry signal which often does not correspond to the peaks of the oscillations.
In this case the evaluation must be made at the moment of the signal.
Ultimately, the elements to be evaluated for the correct deadline are:
The Time Frame
Rule 2 (or as a second option Rule 1.)
The entry signal of the strategy
As a suggestion for the evaluation of the best expiry, the Zig-Zag indicator already present among those supplied on metatrader can be of help.
It can be seen from the image above (Eur/Usd M5), where we have inserted the Zig-Zag indicator, the fluctuations repeat cyclically giving us the possibility to choose, even if with a certain approximation, the best expiry for our trade on binary options.
Of course the appearance of the Zig Zag will depend on the settings. The trader will keep the default one or choose on the basis of a visualization of sufficient clarity of highs and lows.
Note: We remind you that the PDF attached to the strategy is available at the end of the page and can be downloaded free of charge. The already set indicators are logically attached in the full version.
Attention: If you already use one of our brokers for real, contact us by providing your ID to immediately obtain the complete download (email@example.com).
We have been asked many times what kind of strategy would be suitable for those who are new to trading .
We have therefore developed a trading system that is simply based on only two indicators, but highly effective, chosen and tested for a long time. The trader just has to follow the instructions in this manual and open the position after the conditions are met.
This strategy was created thinking of those who do not yet have sufficient knowledge of technical analysis, but nevertheless want to try their hand at binary options, perhaps starting from a simple demo, to see “what happens”.
As always, we recommend that you delve into the main topics that the trader should know, such as money management, trendlines, supports and resistances, etc. However, to get started, it is sufficient to have a minimum of familiarity with the free Metatrader (MT4) platform to use as a reference, where two simple indicators and the template will be installed, i.e. the 3 files attached to the system (in the full download version ) .
Note: We remind you that the PDF attached to the strategy is already available and can be downloaded free of charge, always at the end of the page. The indicators are logically attached in the full version, but it is possible to look for alternatives on the net.
The strategy provides for short deadlines , of around 20-30 minutes, in any case the one closest to these values that the broker makes available to us.
The system is valid for any currency pair and at any time (pay attention to the news ).
Prepare the graph
First you need to have the Metatrader 4 platform available; if you don’t have it, you can find the free download link here (the link takes you to the Alpari broker, which in addition to the metatrader to download for free also allows binary options trading directly from the chart).
Once MT4 is activated, you need to install the two indicators and the template; if you don’t remember how to do it read here. The chart will look something like this (here we are on GBP/USD M1):
The areas in blue are those of the “Fishing Area” and below the “Fisherman_by_FF” indicator.
We need to choose a currency pair that is close to the blue zone. To this end, we prepare the chart on the M1 time frame, to better observe the movement of the candles. However, it will be M5 that will give us the actual entry signal .
In the image above you can see that the GBP/USD is approaching the lower zone.
The input signal will be obtained when the following three conditions occur simultaneously:
1. The M1 candle closes inside the blue “Fisher Area”, or goes beyond it. 2. The color of the Fisherman indicator on M5 changes color. Example, still in the image above, red to green 3. The color of the Fisherman indicator on M1 has the same color as M5. Example, in the case of the image above, from red to green.
Fisher Area Indicator
It is the indicator that shows the blue zones. The operation of the indicator is simple.
To have an entry signal, the candle must be closed inside the blue area, or above, having therefore exceeded it.
Since these are reversal zones , the upper area will give a Put entry signal, the lower one a Call entry.
Note that the areas change every hour, and therefore it is advisable to manually reset the graph when the hour expires. It is sufficient to switch for example from M1 to M5, or vice versa.
Practical examples of trading
We are on M5, around 11:30 and the candles are in the blue area, so we await the signal of the lower colored indicator.
We know that the blue areas change every hour, so the next 12:00.
If the signal arrives after 12:00 we will consider it valid even if the blue zones have changed.
After 12:00 the zones modified themselves, the candles are now no longer in the blue area, but we will not take this into account, as the zone has previously given us confirmation of possible entry.
When the color of the lower fisherman indicator on M5 changes, we open the PUT operation, as shown in the figure, provided that the color is still red on M1 as well.
The entry, which took place at about 12:10, concluded ITM (in the money), as can be seen from the trend of the graph in this image above.
Verified that both M5 and M1 both have the red color (otherwise green, lower area) of the Fisherman indicator, you enter at the close of the M5 candle:
In practice, the appearance of a first colored segment on M5 is not enough, but it is necessary to wait for the appearance of a second one.
In the figure we see that the candles on M5 have reached the upper blue area, but the lower indicator has not yet given the confirmation with the color change. Let’s wait.
Over time, a first red segment appears (figure below). That’s not enough, we have to wait for a later one:
Finally the input signal arrives:
However, we must make sure that on M1 the color is also red:
The color matches, and therefore we proceed with the purchase of the Put option, with an expiry of about 25 minutes (in this practical example.
The operation ends ITM, as seen in the following image:
These tips are based on our trading experience with the fisherman system, which we use frequently and test in practice.
1. The color change usually happens first on m1, but we need to follow up when the change happens on m5.
Always make sure, for input signal confirmation on M5, that the indicator on M1 is still the same color , thus confirming the correctness of the indicator signal.
Otherwise, wait for correspondence.
2. We must wait for the closing of the M5 candle corresponding to the color change. Otherwise the candle, being still forming, could change the color of the indicator again.
In practice we wait for the appearance of a second colored segment on M5.
If you have installed the attached template, you don’t need to make any settings and you can skip this paragraph. In case it helps you, the adjustments we apply for the FisherArea indicator can be found in the PDF version
Swing Trading: The useful strategy for beginners and experts
You will know that brokers offer trading strategies from time to time through their newsletters.
Of course brokers are always biased, but often their information can be used to our advantage by stripping it of superfluous bits.
This time we talk about ” Swing Trading “, a technique useful for beginners but also for experienced traders.
What is Swing Trading? With this technique the trader tries to capture the market swings as the price of the asset fluctuates over short, intermediate or long-term time intervals. Compared to “Day Trading”, in swing trading operations can be opened and closed within a limited period of time.
To anticipate swings, the trader often uses technical analysis. Analyzing price charts and patterns can help you identify early signs of potential swings and catch the optimal time to enter a trade.
You can use a variety of different tools for technical analysis.
Here are some basic technical analysis tools you can consider for your swing trading approach.
The Moving Average (MA): A popular tool for identifying trend direction.
The Bollinger Bands RSI trading pattern is perhaps the most respected trading system . In this system , ForzaForex.it illustrates complete trading rules which are added to those commonly found in normal tutorials and which give a greater guarantee of success.
Bollinger Bands RSI involves the combined use of two well-known indicators:
RSI INDICATOR (Relative Strength Index)
This is one of the most effective classic techniques , and experienced traders agree. So, is the problem of winning with binary trading now solved? No. It would be too nice and simple if that were the case.
We also need a cold behavior typical of the seasoned trader who patiently waits for the right signal for entry, without haste. Furthermore, a possible loss does not distract him from his goal: to follow the rules.
This classic technique is suitable for use with any binary options broker, perhaps coupled with Metatrader.
Before talking about the real rules of the strategy with Bollinger bands and RSI, it is useful to refresh the functioning of the two indicators involved, in order to master the mechanism of the system that we are going to use.
We also recall that the Bollinger bands pair well with an “oscillator” indicator, such as the stochastic . In any case, coupling with the RSI oscillator remains one of the most classic.
The Bollinger Bands RSI strategy, as the name implies, uses both the Bollinger Bands and the RSI indicator to take advantage of the momentary changes in direction (“bounce” or “bounce”) that occur during the main trend, as illustrated in figure:
Strategy Bollinger Bands RSI: Current trend change
Entry will take place in “Call” at the second reversal, in the direction of the main trend, as we will see later.
The Bollinger Bands RSI pattern indicators
Bollinger Bands indicator (20, 2)
RSI indicator (Relative Strength Index) (14)
At a first observation it would seem valid to buy when the price touches the lower band and to sell when it touches the upper band . Technically this works, but it is a risky way to trade Bollinger Bands.
Prices touch the Bollinger Bands
Sometimes strong trends cross these bands and lead the unfortunate trader to losses. That’s why we will go alongside the RSI indicator as confirmation for the price reversal at the upper or lower band.
These two indicators, Bollinger and RSI, being widely used by traders, are usually part of the standard equipment of most graphic platforms, such as the Metatrader for example, and in this strategy it is not necessary to change the default settings.
As an alternative to observing the chart on Metatrader, it is convenient to use these indicators directly in the trading platform. They have, in addition to other indicators available as standard , both the Bollinger Bands and the RSI .
Rules of the Bollinger Bands RSI
Rule #1: Identify the current trend.
A lateral market situation is not valid , i.e. without an apparent trend, generally with horizontal price distribution. Otherwise this strategy will not work as well.
How to spot the trend
There are many methods to identify a trend, such as the use of trendlines, lines that combine maximums with maximums of price fluctuations between them and minimums with minimums. If you want to know the trend directly, without the need for our analysis, you can use the “Technical Investing Summary” , which for example for EUR/USD gives us information like:
The following description concerns a case of a positive trend. The opposite case is analogous.
As an example, suppose we have therefore identified a positive trend, rising prices (uptrend):
Rule No. 2: The asset, which was in an “uptrend” phase, changes direction and heads down towards the lower band until it touches it.
Prices head towards the lower band, until they touch it, or almost.
To clarify better, let’s see that prices have a general positive trend, but in the short term the momentary trend changes after generally touching the upper band, bringing the candles down to the lower band.
The price is rejected and touches the lower band
Rule n°3: Once the candlestick touches the lower band we look at the RSI.
It should be between 30% and 50% and UPLOAD , i.e. same direction as the general trend.
The trend of the RSI is up and is between 30% and 50%. Its direction is the same as the general trend
RSI regulation note
– If the RSI indicator does not have the 50% level, simply add it using the settings.– By default it does not have the central line 50% but this can be solved as follows:
Metatrader case– In Metatrader you can add the 50% level in the indicator settings.
IQ Option Case– IQ Option’s RSI has only two levels. To remedy this, two identical indicators can be activated by changing the settings, one with 30 and 50, the other with 50 and 70:
In the case we were observing before of a general positive trend, if the RSI is not in this range 30 – 50, and for example it is over 50, we will not enter the trade.
RSI on the rise
Otherwise, buy in “put”, RSI should be between 50 and 70 and have a decreasing direction.
Let’s zoom in to see the RSI line in the figure opposite.
Rule n°4: ENTRY MOMENT at the appearance of a decisive bullish candle.
Once you notice this movement prepare yourself for entry.
The price has touched the lower band and the RSI is rising, you can enter after seeing a strong bullish green candlestick:
Entry after a strong bullish green candlestick
Second Entrance. When the price touches the central band you can decide to make a second entry with a good chance of success.
An even more comprehensive strategy makes use of divergences:
The Bollinger Bands – RSI strategy is a classic trading system used by many traders. It is simple and gives good results by combining two of the most popular binary options indicators.
The Bollinger Bands. One of the most used binary options trading indicators.
But are Bollinger Bands still useful? How do they adjust? Alone or with other indicators?
We have already recently talked about trading based on a moving average and then on two moving averages. If we wanted to use 3 moving averages, we could install the Bollinger Bands indicator , which is based on 3 of these averages.
The purpose of the bands is to give a relative view of above and below . Thus, in theory, prices are high in the upper band and low in the lower band.
In this article we see how to set the parameters according to our trading needs, and for those who want to go further, a more complete application with matching RSI indicator.
What are Bollinger Bands? If you have never used this indicator in the past, take a look at the graph in the figure to see what the Bollinger Bands look like :
Image of the Bollinger Bands in the IQ Option trading platform . The indicator is present by default on most platforms.
What are Bollinger Bands
Bollinger Bands, also known as “Bollinger Bands” are well known in the trading community.
They are named after their creator, John Bollinger, who made them known in the early eighties. The purpose of these bands was to give a relative definition of upper and lower. Thus, in theory, prices are high in the upper band and low in the lower band.
Bollinger Bands include three different lines , upper, middle, lower . The midline typically serves as the basis for both the upper and lower lines. They are mainly used to determine when prices are overbought and oversold. From this it can be deduced that it is convenient to sell when prices touch the upper band and buy when prices touch the lower one.
The space between the bands is determined by “volatility” , i.e. how much the price action varies over time. A high volatility, for example, indicates a high trading volume. Many trading strategies are often more used in the presence of high volatility, as more reliable signals are obtained.
The central or median band consists of a 20-period moving average , while the upper and lower bands have a standard deviation from this, which in practice means that the width of the bands yields a statistical measure of the volatility of the market.
When you see the broad bands it means that we are in the presence of high volatility , narrow bands low volatility .
Video Tutorial Bollinger Bands
In the video a brief but understandable description of the Bollinger Bands: https://www.youtube.com/embed/CnJYMmU6c7k
Bollinger Bands is an indicator that provides a range of movement in the price of an asset .
It is created, as already mentioned, on the basis of three moving averages , one of them in the center, the other two at an equal distance from it.
The price touches one of the Bollinger Bands
Bandwidth is calculated according to a mathematical standard deviation formula. It is possible to set the coefficient in the indicator settings. The higher this is, the wider the band will be and the price chart will touch the margins more rarely.
Wide corridor = higher volatility
Another adjustment concerns the value of the period , i.e. the number of candles used in calculating the value of the indicator. The increase in the period “smooths” the corridor but does not guarantee an increase in the accuracy of the indicator readings.
When the price reaches or touches one of the lines, the probability of its movement shifts in the opposite direction.
Breaking any of the lines signals a probable trend move through the perforation . The higher the market volatility , the wider the corridor. Prolonged presence of the indicator in a narrow corridor usually precedes the start of a strong movement in the market.
The use of Bollinger Bands in association with other indicators (indicators/oscillators such as Stochastic or RSI) is recommended as it is ineffective during a strong trend.
Trading strategy with Bollinger Bands + RSI
The most classic of binary options strategies which involves the combined use of two well-known indicators:
RSI INDICATOR (Relative Strength Index)
The Bollinger Bands Strategy with RSI is perhaps the most popular band trading system.
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