A popular BBand strategy is a well-tested trading strategy that works well for both advanced and beginner traders. Let’s explore below how you can generate great buy and sell signals from the simple-to-understand strategy.
Most trading strategies require complicated technical analysis and calculations. However, BBand Strategy is accessible even for a beginning trader. The BBand strategy is based on a modified Bollinger Bands used to gauge trend change and set stop orders. With BBand Strategy, you will be able to get a lots of useful information, including:
- Trend continuation or reversal
- Periods of market consolidation
- Periods of upcoming large volatility breakouts
- Possible market tops or bottoms, and potential price targets
BBand strategy works for short-term contracts with the expiration period of less than 5 minutes. If you follow the steps and stick to the rules, the probability of successful trades will increase.
How to configure Pocket Option terminal for BBand strategy?
So, let’s apply the BBand Strategy and show how to configure it in the Pocket Option Terminal. Go to the “Chart Type” menu to configure the view. Select “Candles” and set the time frame M1.
Then, add a technical line to the chart buy clicking on the brush icon in the “Build” menu and select the horizontal line.
You can adjust the lines by moving it up and down the chart by holding the left mouse button.
Congratulations, you configured the terminal and now you can apply BBand strategy.
When to buy a contract?
We recommend setting up the five-minute period. For example, if you start trading at 11:23 pm, the next period is from 11:25 to 11:30 pm.
Therefore, in order not to lose the beginning of price formation in a segment, drag the horizontal line to the opening of the candle 11:25. Next, you need to wait until the formation of the “correction pool” – a situation where the price enters a five-minute period and leaves it at about one point.
The further direction of the market, as a rule, coincides with the direction of correction.
Therefore, you need to buy a CALL contract when, at the beginning of a five-minute interval, the price opened and moved down, but by the end of the price is reversed and closed at about the same point.
In the case of the PUT option, the circumstances should be opposite. The correction pool should be bearish (the uptrend), and the price should close at the same point as it opened at the beginning of the five-minute segment .
The expiration period should be equal to 5 minutes.
You should NOT buy a contract when the correction does not reach the point at which the next “five-minute” slot has opened. Also, a signal may turn out to be false when the pool turns out to be much larger than before. Obviously, simple BBand strategy can become the main tool for making profit on binary options.
We hope that you find our tips on BBand strategy useful. If you want to try it out, open a demo account with Option Broker and you will get an extended number of indicators. By practicing without any risk you will be able to gain an overall enhanced trading experience. Beginning traders should consider using our demo trading account first, in order to test the strategies they have learned in a risk-free trading environment, before using them in the live markets.
