Binary options strategy with Bollinger bands and ADX indicator

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Binary options strategy with Bollinger bands and ADX indicator

Surely one of the best Forex trading strategies found on, that is the most authoritative italian strategies site of binary options, is the retest on Bollinger bands with ADX indicator. This strategy shows a series of impressive achievements. Let’s see how to use it.

Forex trading strategy

You must first analyse a Japanese candlestick chart with time-frame of 60 seconds (m1). Then you need to select an asset, and associate to it the bollinger bands 20-2 front-weighted. Now you must add the ADX oscillator. At this point it should be expected that the level of the price goes to make a retest on bollinger bands and invest to rebound with a maturity of 120 seconds. So, if the level of the price touches the lower Bollinger Band you will invest upward (call, up), and when it touches the band bollinger higher you have to invest downward (put, down).

Every blue arrow in the following images is a profitable investment

But what does the ADX indicator? It is used to delimit the area where we can trade. Since we are looking for a cross-market, it is necessary that the ADX is below 30, preferably below 20. In the images shown below you can see the incredible number of successes you can get in one trading section of approximately 3 hours. It’s really impressive to see the results of applying this strategy every day. The number of profitable investment is always much higher than the number of incorrect investments. It is a strategy that we see generally applied every morning from 9:00 to 12:00 Italian time, and always with great success. Surely it is a great way to make trading with binary options. It is essential that the broker used for this strategy, allow to invest in binary options with a maturity of 120 seconds.

Best broker for this strategy: 24option

Bollinger Bands

Brief Description:These are volatility bands that come below and above a moving average.

The development of the bands is directly associated with a famous trader and broker, john Bollinger. The bands have remained a powerful technical trading tool since their establishment in the early periods of 1980s. During that time, observation and trading was too static and hence the need for dynamic volatility in trading and observation.

Purpose of Bollinger bands

Provision of comparative definition of low and high. At the upper band, prices are always high if definition is anything to go by. On the other hand, the lower band records low prices. This definition helps in the recognition of a rigorous pattern that becomes very helpful in comparing the actions of indicators and price so as to arrive at trading decisions that are systematic in nature.

Composition of Bollinger Bands

They are made up of a three curved set.teh curves are drawn in a specific pattern relational to the price of securities.

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Middle band; basically it forms the basis for the other two bands, lower and upper. In its practical form, it is a simple moving average line that measures the short term trend. In other words, it is used for intermediate analysis.

The distance between the middle band and the other bands- both lower and upper is computed by volatility, which is usually the standard deviation of similar data used in determining the average. Default parameters of 2 standard deviation and 20 periods have been realized. However, these parameters are adjustable just to be a good suit to your purposes.

In today’s business world, traders have come to a point of appreciating Bollinger Bands as an extremely reliable tool for the assessment of anticipated price actions. The bands have found wide application in the entire financial markets; for instance commodities markets, equities, futures, forex and in other time frame transactions ranging from short term periods to longer periods such as weekly and monthly.

Bollinger bands have found their application in binary options. Various types of binary options products are trading in the market. Some of these types are:

Digital/standard binary options; these are the common binary options. They work in a simple way where you are only required to make a prediction that an underlying asset’s price will either rise or fall at the expiry time of a given trade.

Touch; these binary options can assume different sizes and shapes. Consists of No Touch, One and Double Touch.

One touch is available as digital binary options; double touch means that the determined value of the asset has to come twice before the expiry of the trade. No touch on the other hand is when the underlying asset’s price does not have to be necessarily touched.

Boundary; these are common in markets with static price movements.

Turbo; these binary options have a short span in that their expiration comes so quickly, usually in 5,2 or 1 minutes. Some are super turbo and expire within 15 or 30 seconds.

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Interpretation of the Bollinger Bands

Squeeze breakouts; this theory holds that the market will oscillate and make cycles between the two volatility periods of high and low. A low volatility period occurs when Bollinger Bands appear as if they are squeezed together. It is at this point when traders position themselves strategically ready for a breakout when volatility resumes back again into the market.

Increasing volatility; this signal will be observed when the lower and upper bands move in the opposite directions. This is good evidence that a trend exists in the market and therefore one should stay in a trade.

Steady trend; the signal appears when the bands point and move in the same direction. The movement could be a steady down or upward. The best strategy to use in this kind of a market is trading in pullbacks.

End of trend; this signal marks the conclusion of a trend. For instance, in an uptrend, it will occur when the upper band makes a slight curl downwards. End of trend signal is that point when the price consolidates either sideways or by making a range type motion that touches the other band.

Support and resistance; both the bottom and top bands experience some support and resistance. For instance, if you are transacting the 15M, then search for those levels of resistance and support on the 1H chart. While on the 1H chart, look for the 4H and monitor it keenly. What is the significance of the 4H? It corresponds to the daily.

10# Bollinger Bands, RSI and ADX Trading System

Bollinger Bands Trading

This is a Forex Scalping Trading Sytem based on the Bollinger Bands.

Bollinger bands (20, 2);

Y ou must only trade this system between 2am to 5am EST, 8am to 12am EST and 7.30pm to 10pm EST.

Do not scalp 30 minutes before a orange or red news

report and not for a hour afterwards.

Setup: is for price to move above the lower or lower Bollinger Bands , RSI raise above the 70 line or below the 30 line and ADX

Long Entry : price to move below the upper Bollinger Bands( deviation 2 and 20 period), RSI (7 period ) raise above the 30 line and ADX

Short Entry : price to move above the upper Bollinger Bands( deviation 2 and 20 period), RSI (7 period ) raise below the 70 line and ADX

Profit Exit : 3 options: 1, exit position when the price touches the middle band, 2) when the price touches the opposite band, 6 pips target profit.

Loss Exit : stop loss on high/low entry bar or 7pips loss

bollinger Bands RSI and ADX

Share your opinion, can help everyone to understand the forex strategy.

Candice (Saturday, 14 March 2020 02:36)

Hi everyone.Does this work on binary options

Sadiq (Sunday, 08 December 2020 12:10)

The indicator is awesome, good to enter buy and sell easily

Gorge (Saturday, 26 October 2020 20:36)

How do I use it with the same pointers in different
Time frames 5,15,30,60 minutes

Sarah (Saturday, 12 October 2020 19:05)

Awesome on binary

30Pips Home Business (Friday, 03 May 2020 14:54)

This is a great BB Reversal / Momo trading system! You can trade Reversal Candlestick Pattern BB breakout, ADX/RSI Combo when the market is ranging or reversing, AND/OR, you can trade ADX>32 / BB Breakout Momentum when the market is trending

To confirm your trend momentum trading, add a second BB (20, 1). when the price enter the buy/sell zone and adx above 32, you take the trade and exit when the price leaves the sell/buy zone created by (20,2 & 20,1) BB

Matt (Thursday, 11 April 2020 16:21)

Hi Sergey, I think we need the ADX to be bellow 32 because this is effectively a reversal system, which is usually counter trend. So by the ADX being bellow 32 it shows the trend is not very strong and so the reversal is more likely to happen.

SERGEY (Tuesday, 14 August 2020 19:12)

Why do we need level 31? on the adx indicator

Matthew Douglas (Friday, 08 April 2020 17:38)

Thx Very much for the great system.

Shekhar Dugam (Monday, 30 March 2020 15:37)

Is this strategy applicable to bigger time frame like 4 hour and daily. Please reply.

albert katete (Friday, 26 December 2020 19:45)

This system works well for 2 minutes binary options. It can be used with martingale if the first entry fails. Say $5, then $10/$12, $25, . . . . . . . . A definite winner on every cycle of entries.

pipandrun (Saturday, 11 January 2020 12:22)

Long Entry: Price to move below the LOWER Bollinger Band, or?

trad (Saturday, 18 February 2020 20:39)

Do not scalp 30 minutes before a orange or red news

where i can get this news?

well i am trading with this strategy too, but i have bb(50)+ mfi(8) and + cci to dont get in bad trades! never buj when cci is crossing 100 or sell when cci is crossing -100(going down to -101)
thanks for share anyways!

15# Bollinger Bands and ADX Trading System

Submit by JanusTrader

Bollinger Bands is an indicator that allows users to compare volatility and provide a relative definition of high and low. The indicator consists of three bands which usually encompass the majority of price action:

• A simple moving average in the middle

• An upper band (SMA plus 2 standard deviations)

• A lower band (SMA minus 2 standard deviations)

The basic interpretation of Bollinger Bands is that price tends to stay within the upper and lower bands. Because standard deviation is a measure of volatility, Bollinger bands adjust themselves to the market conditions. When the markets become more volatile, the bands widen (move farther away from the average), and during less volatile periods, the bands contract (move closer to the average). The tightening of the bands are often used by technical traders as an early indication that the volatility is about to increase sharply.

Bollinger Bands Characteristics:

• Sharp price changes tend to occur after the bands tighten as volatility

• When price moves outside the bands, a continuation of the current trend is implied.

• Bottoms and tops made outside the bands followed by bottoms and tops made inside the bands call for a reversal in the trend.

• A move that originates at one band tends to go all the way to the other band.

This observation is useful when projecting price targets.

Based on these, one may go long or buy the market below the lower band while selling short the market above the upper band. However, this can become a dangerous proposition if the market develops a strong trend, and price starts “walking the band” creating new extreme price levels.

To counter this disadvantage of the Bollinger Bands, we can use the ADX indicator. The ADX indicator measures the strength of the current trend, rising during extreme

trending states, and falling as the market retraces in a range-bound state. The ADX line has definite advantages because it filters out a lot of the false oscillator signals which are frequently given early in a move.

• When the ADX starts rising from a low level, it signals the beginning of a

• The trend is confirmed, when the ADX has risen above the 20-25 value.

• When the ADX has reached an overbought level of 40-50 and starts

consolidating or turning down, it signals the end of the current trend.

• A decline of the ADX signals the consolidation or indecision of the market. It is this last feature of the ADX that we shall combine along with the Bollinger bands.

If we are looking for a downtrend to end, we would look for price to thrust outside the lower Bollinger band by reaching an extreme oversold level. This by itself may not be the confirmation that the trend has run out of strength.

But at this point, if the ADX starts declining from its overbought values, then we have a better probability of the momentum changing. The market then reaches “a critical turning point” as the ADX turns back to the downside, while the price falls below the lower Bollinger Band.

This indicates that although the market has accomplished a relatively oversold state, the internal strength of the trend has weakened and now stands a smaller chance of continuing lower.

Let us observe the use of this strategy on the following chart example.

ADX Forex Strategies

The very first example marked as circle.1, proves the effectiveness of this technique.

Price had been in a downtrend, and we had a retracement with a close inside the

By itself, this should have been a good signal to go long. But if we observe the ADX,

it had not yet reached the overbought area, indicating that there is still some

momentum left in the downtrend. And surely enough, this turned out to be a minor

retracement with price resuming the downtrend.

We had a similar situation (at circle.2) only this time the ADX had crossed over to

the extreme overbought zone, and had started retracing down, indicating the trend

Since there was the required confirmation form the ADX, we could enter a long trade

on the price bar which causes the ADX to cross the 40 line to the downside. The stop

should be placed beneath the low of the price bar which breached the lower band,

and we set our price objective on the upper band.

As it turned out, this trade did not give much of a move, as we exited as soon as

price reached the upper band. The stop was also safe as the slowly made its way to

We had a similar situation at circle.3, where the breach of the lower band was

confirmed by the ADX reaching its overbought level. By following our rules, we had

another confirmed long trade.

If we look at situations 4 and 5, the breach of the upper band was followed by a

price reversal, but we ignore those trades since the ADX is absolutely at its lower

levels and the Bollinger bands are flat, indicating that the market is in a non trending

state. In such cases, we do not enter a trade as we do not know when and where the

So with the proper use this little technique and a good amount of patience and

discipline, we can take advantage of these frequently occurring setups.

Share your opinion, can help everyone to understand the forex strategy.

joe (Monday, 11 August 2020 07:11)

The font is quite hard to read

Kola (Friday, 15 January 2020 16:21)

Thank you for this info, i found a robort that uses this strategy, the robort is autosisera trader

Terence (Monday, 25 July 2020 02:45)

I am afraid you get a wrong idea on ADX.
More simple way to do
ADX look upwards is trend, BB outer band = nothing
ADX look downwards is sideways, BB outer band hit you back
Thus, entry when ADX turn to look upwards and exit when ADX turn to look downwards
Don’t try on sideways, just wait trend to go

2nd check on trend or sideways, take a look BB outer band other side.
If other side outer band turn backwards, and BB width shrink,exit.

T. Nat (Thursday, 20 July 2020 16:44)

Thanks for sharing this strategy!

Allan Beaulieu (Thursday, 03 August 2020 15:12)

This system will get you losses especially in volatile markets. For 2 reasons. Number 1. a fatal flaw of this system is ironically in what the author/advocate is describing as the system’s advantage. Read below what i put in quotes and stars from his/her statement:
• A decline of the ADX signals the ****”consolidation or indecision of the market”***. It is this last feature of the ADX that we shall combine along with the Bollinger bands.

Consolidation and indecision does not mean reversal. price can make a move, consolidate and keep going in the initial direction. You must never take a trading postion when price is in consolidation or indecision especially when you are trend trading. you will be stopped out half the time or more.

Number 2. You should use MAs of the H1 chart and look at the trend of the week. Any other trend lower than the trend of the week will be crushed by higher time frame trend. trend of the week(not weekly chart. i mean the trend of the week and prior week) is strongest because the big banks set daily and weekly goals so the trend of the day and week is where their immediate focus is and the trend of the week is most important because it is bigger then the trend of the day and it creates an environment for the day trend to thrive.

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