FREE Forex Binary Options System That Uses Bollinger Bands And Stochastic Oscillator!

You can use this strategy for scalping as well as trading binary options. Binary Options are much easier to trade as compared to forex. However, just like forex you need a system with a high winrate if you really want to make money with binary options. Many vendors are selling signals for binary options at a high price. With this simple FREE Forex Binary Options System, you will be able to generate your own signals any time of the day whenever you have around 30-60 minutes of spare time.  So in this post, we will discuss a very simple binary options system. This system can also be used for scalping forex. Infact, I had developed this system for scalping on the M5 timeframe but now I also use it to trade binary options with a high winrate of 90%. Let’s discuss this system in detail. You should have some idea of how to spot divergences because this system basically uses divergences to make the trading decisions. Divergence develops when the price action and the indicator move in opposite direction. Below is a screenshot of this system in action on M5 timeframe!

FREE Binary Options System

First you need to install Bollinger Bands with the usual setting on your chart. We will use the Stochastic Oscillator with the setting of 5,3,3 for spotting divergences. As you can see in the above screenshot we spotted a bearish divergence. Check that the price is touching the upper Bollinger Band before entering into a trade.  The price is indeed touching the upper Bollinger Band. So we buy a one hour GBP/USD put and wait for one hour to check whether we won or lost. We did win as the above screenshot indicates. Now, the second screenshot below shows that after nearly 1 and a half hour, a bullish divergence appeared on the chart. This time the price is below the lower Bollinger Band. This means we are going to buy a one hour GBP/USD call this time. Check after one hour, we had won the trade.

FREE Binary Options Strategy

You will get many many signals with this system daily. After one and a half hour their is another bearish divergence appearing on the chart. Price action is above the upper Bollinger Band. You have another setup for a trade. Buy a one hour GBP/USD put option. After one hour you had made 85%.

FREE Binary Options System

You might be wondering why this system works. This simple system works because it uses a simple law of statistics. Price action cannot deviate from the mean for long. This deviation of the price from the mean is being measured by the Bollinger Bands. The upper Bollinger Band is 2 deviations above the mean and the lower Bollinger Band is 2 deviations below the mean. So when the price touches these bands, it tries revert to the mean. While reverting to the mean, most of the time it overshoots and touches the other band. When it does it changes direction and again tries to revert to the mean and in the process now touches the other band and the process continues all day long.

Now generating your own signals can be a time consuming process. In the beginning, you need a lot of practice in order to generate winning signals. This takes time and can be tiring as well. You can try these Binary Options Trading Signals and trade live with a pro trader Franco on a daily basis. You not only make money but you also learn how to trade binary options like a pro.

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23 Comments

  • Maurice Lampl

    Reply Reply December 18, 2013

    Yes, I use the Bollinger Bands AND the William’s %R as my indicators and am doing well. I use the 5M charts.

  • Jonathan

    Reply Reply July 31, 2014

    M5 chart with 1 hour expiry?
    Please, did I read well or there was a typo error in the writeup?
    1 hour expiry (12 bars) will be too much. Even looking at the screenshot, we lost two good trades whereas we could have won all trades if we chose lesser expiry.

    @Maurice, please how do I use the William’s %R? Also what expiry do you use?

    • admin

      Reply Reply August 1, 2014

      Trading more is not important. 2-3 trades daily should be more than enough. What is important is to win each and every trade. In the end it all boils down to probability. Giving more time means the chances of winning increases. I never use William’s %R. I am happy with Stochastic and MACD.

      • Jonathan

        Reply Reply August 2, 2014

        Ok. I get it. But I guess you place a high amount on each trade to make a good profit at 2-3 trades daily.
        Even taking a closer look at the screenshot showed we won all trades. But I would still like to use a shorter expiry like 30 mins.

        • admin

          Reply Reply August 2, 2014

          You can test 30 minutes as expiry. What we want is a strong uptrend or downtrend that takes the price away from the entry price. Price has a tendency to whipsaw in the short term. So you need to test it on 30 minutes and see how it works. This is what I do. First determine the trend on H4 and H1. If the trend on H4 and H1 is up, I only enter into a long trade means I only buy calls. If the trend on H4 and H1 is down. I only follow the down signals on M5 and only buy puts. Trade with the trend. This increases your winrate manifold. We need to follow risk and money management rules strictly. Trading with higher amounts is not my policy. I follow the risk and money management very strictly and don’t risk more than 5% of account equity on a single trade.

          • Jonathan

            August 2, 2014

            wow! I am learning something new from a pro. This conversation is becoming interesting and revealing for me.

            please, how can I determine the trend on H4 and H1? Do you use the divergence also to determine on the H4 and H1?

          • admin

            August 2, 2014

            You don’t need to use divergence to determine the trend on H4 or H1. Determining the trend on H4 or H1 is easy. Take a look at the GBP/USD H4 screenshot below:
            Swing Trade
            The red line is EMA21 and is known as the Fast Line. The aqua line is EMA55 and is known as the Slow Line. When the Fast Line is above the Slow Line, the trend is up like that in the above screenshot. In the same manner, when the Fast Line is below the Slow Line, the trend is down like that in the screenshot below.
            Swing Trade

  • jonathan

    Reply Reply August 9, 2014

    Please, I have two indicators that auto-recognises and sounds alerts when a divergence is spotted.
    BUT they are based on macd and Rsi indicators as against stochastics which you recommend.

    Is it okay to use the indicators with your strategy since they are oscillators just like the stoch.?

    • admin

      Reply Reply August 9, 2014

      Yes, why not. Any oscillator can work with my system. As I have said in a previous reply to your comment, always trade in the direction of the trend. When you find the trend up on H1 or H4 whatever you prefer, only take the trade on M5 on a bullish divergence. Similarly when you find the trend down on H1 or H4, only trade bearish divergences on M5.

      • Hans

        Reply Reply August 20, 2014

        Hello,
        Which indicator do you use to show the divergence on the chart?

        • admin

          Reply Reply August 20, 2014

          Stochastic as I think it gives the best results.

  • nadjib

    Reply Reply August 13, 2014

    hello thank you sir hissam if you can give me other strategy for binary or best seting tichnical indicators for entre in short trade in5m or 15m thank you verry much

  • nadjib

    Reply Reply August 23, 2014

    Hello professor I hope to be in good health, I want you to try my method is the intersection of RSI 2.o 12 or use the MACD 4.6.4 or above to see the buy and sell signals Is it possible for me to try this strategy of Vdketqubl greetings and sincere thanks

    • admin

      Reply Reply August 26, 2014

      you can explain your strategy below!

  • Vishwajeet

    Reply Reply September 18, 2014

    Hi, MACD is also called ‘moving average convergence divergence’. Does MACD also give the same indication like in your strategy? I mean it’s red line (in your chart in above comments) shows the price-action (smoothed one I mean, perhaps of previous N candles for every candle) & then it’s intersection with green line also shows a potential reversal… So if used in line with the trend or when price is outside the bollinger bands, will it mean the same strategy?

    • admin

      Reply Reply September 18, 2014

      MACD can also be used. In fact I would suggest to combine Stochastic with MACD when trading this strategy. This is what I do. Stochastic and MACD give false signals often. Divergence can also be false. Candlesticks also can mislead. So we combine them all and only trade when we find confluence between them. If these indicators are contradicting each other, I stay out of the market. Bollinger bands are pretty useless. I have stopped using them. I will write a detailed blog post on my MACD+Stochastic Strategy as soon as I get some time.

  • Vishwajeet

    Reply Reply September 18, 2014

    I see that the slope of MACD green line matches pretty well with your stochastic & slope of red line matches pretty well with the price-action….so can a MACD alert indicator be used for same purpose?

    • admin

      Reply Reply September 18, 2014

      Slopes are irrelevant. Looking at the slopes will only confuse you. Keep everything simple. We will have to combine MACD, Stochastic, Candlesticks and Moving Averages into one single strategy. As I have said, I will write a detailed blog post on how to do that.

      • Jonathan

        Reply Reply September 19, 2014

        PLEASEEEEEE do that as soon as possible. Your followers are anxiously waiting.

  • Kunle

    Reply Reply October 22, 2014

    derblog.com/329/a-free-forex-binary-options-system-with-above-90-average-winrate/

    I tried this link and it gave a response that for members only. How can i join binary option signal service? I read in one of the highlights that there is a system that can generate $5000 weekly and another that can double the account monthly. P;ease can you give me the link for these two systems/strategies.

    tried the link

    • admin

      Reply Reply October 23, 2014

      Yes, this is a simple system that you can test on the demo account first and check how much it can make per week. I have made it a members only post. You can read this post for $1 and get our forex signals for 15 days. At the end of 15 days, you can continue to get signals if you want. You can also cancel anytime. The forex system has been explained in detail in another post. The link is available in the welcome email of the Swing Trading Newsletter. I have explained everything in detail. Please feel free to leave your comments. I will try to answer your questions about the systems.

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