The most profitable binary options strategy

bollinger-bands-scenarioThere are many ways to make money – there are equally more ways to lose money; as the old adage goes.

Before you start investing money, you need to understand a few Binary Option strategies and technicalities involved in the process.

The name Bollinger band – although it seems extremely difficult – is a tested Binary Option Trading Strategy that is difficult to master but extremely useful once you get the hang of it.

What is Bollinger Band Strategy?

Bollinger bands can very helpful to measure market volatility (volatility being the measure of a market tendency to move up or down or show unpredictability). However, the market is never unpredictable – we just do not have the means or measures to see the trends.

Bollinger bands provide signals that can help you make critical decisions. They provide clear sell or buy signals that can be used by traders for their decisions.

Bollinger Bands … what?

Statistical measure taking into consideration moving averages overlaid with standard deviation to include 95% of all trades in a specific time interval. In most circumstances, the period of consideration is 20 days; there are though variant models based on preferred practices and other adjustment factors.

How does Bollinger Band Strategy work?

Bollinger band provides an indication whether the underlying commodity is being sold at a higher price or a lower price. The price of the underlying commodity is at the higher side when they are above the upper band and low when they are lower than the lower band (+/- 2 Standard Deviation). Based on the trend – high means an opportune time to sell and low means and opportune time to buy is clear and indicative of a possible strategy that you can evolve around the readings.

Should you always listen to what the Bollinger Bands have to say?

There is a bit of human judgment involved in the process. While the signals are clear, they are still signals and regardless to them; there are other tangible and certain reasons for trends to show what they are showing. They however offer a great strategy where you can continue to see the signals and buy and sell accordingly.

There are many variations of the Bollinger Bands and although it is one of the most common indicator used in the market – the variants mean that different people and traders take its importance differently.

Traders are known to see historical trend in Bollinger bands and go back as much as 200 days to see for trends. This means that when they are taking into consideration the moving average – they are being historically backed and are more liable to make a correct call.

That said, trends remain almost similar whether the sample size is 20 or 200 days (outliers are easily established even within a smaller sample size). It is up to human judgment to take a right call.

Bollinger Band Strategy

For binary trading, bollinger bands offer a great start to learn about strategies. They are simpler as compared to other advanced strategies and provide very clear and concise signals which are hard to ignore.

bollinger-bands-scenario

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