Bollinger MACD Binary Options System

This strategy combines two indicators, with the help of a single native indicator, the 5-day simple moving average. This is actually a modified moving average strategy as the middle band of the advanced-bollinger-band.ex4 indicator is also a moving average, albeit a slower moving average than the 5SMA.

Chart Setup

  • MetaTrader4 Indicators: 5SMA, MACD.ex4 (set to 6,15,1); advanced_bollinger_band.ex4 indicator (default settings).
  • Preferred Time Frame(s):  5 minutes, 15 minutes, 30 minutes, 1 hour.
  • Recommended Trading Sessions: Any time. Depends on when the indicator signal appears on the chart.
  • Assets: Any

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Trade Example (Click the picture for full size)

Bollinger_MACD-binary-options-strategy

Strategy

The strategy is to look for where the 5-SMA line crosses the middle Bollinger upwards and downwards, matching a similar move of the MACD bars, with the middle band of the advanced_bollinger_band.ex4 indicator corresponding to the zero line of the MACD.

The movement of the 5SMA and the MACD will then be used to trade Call and Put options.

Not every signal shown will be valid. We look for where the candle is either taking off from the middle Bollinger band, or where the candle has pulled back to the middle Bollinger band and will take off in the direction of the trade.

CALL ENTRY RULES

A CALL trade is in view when the following occurs:

  • The 5SMA crosses the middle band of the advanced_bollinger_band.ex4 indicator upwards, or when retreating from above, bounces on it.
  • At the same time, the MACD bars cross the zero line from negative to positive.
  • Initiate the CAL trade if a candle’s opening price is located at the middle Bollinger when the previous two parameters are met, or if the candle has pulled back from a higher open to bounce on the middle band of the advanced_bollinger_band.ex4 indicator.

Expiry for CALL Trade

The expiry of the trade is the closing price of the candle following the entry candle. If the expiry value of this candle looks like it will not meet expectations (i.e. will not be higher than entry price), extend the expiration using the Roll Over function on the trading platform.

PUT ENTRY RULES

A PUT trade is setup when the following occurs:

  • The 5SMA crosses the middle band of the advanced_bollinger_band.ex4 indicator downwards, or when retreating from below, is rejected at this band.
  • At the same time, the MACD bars cross the zero line from positive to negative.
  • Initiate the PUT trade if a candle’s opening price is located at the middle Bollinger when the previous two parameters are met, or if the candle has pulled back up from a lower open to the middle band of the advanced_bollinger_band.ex4 indicator.

Free Download

Download the Bollinger MACD Binary Options System

Expiry for PUT Trade

The expiry of the trade is the closing price of the candle following the entry candle. If the expiry value of this candle looks like it will not meet expectations (i.e. will not be lower than entry price), extend the expiration using the Roll Over function on the trading platform.

This scenario is seen on the last PUT setup on the chart shown above.

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