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!
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.
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%.
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.