Binary Options Strategy: Triple RSI. Strategy for binary options "Triple RSI" Triple rsi

Today we will discuss perhaps the simplest of the existing strategies. The triple RSI strategy is based on a single indicator - Relative Strength Index.

If you are skeptical about such strategies, then I will immediately note that in order to make a profit, it is not at all necessary to use systems based on many different indicators.

The Triple RSI strategy is considered quite profitable, with its help you can make a profit even on options for 60 seconds.

Strategy features

Need to open and connect the indicator Relative Strength Index 3 times:

Each RSI needs different settings:

• first - 5;
• second - 14;
• third - 21.

By setting the settings, we will have a universal instrument that does not have the typical disadvantages of a standard oscillator. This is primarily due to the fact that the indicators of three different periods act as filters: they do not allow opening a position until at least one of them reaches the specified level.

This is especially important for small periods, in which there are a significant number of signals with not the most favorable percentage of passability. However, if you filter such signals, you will be able to improve the patency, and hence increase your profit.

Here's what the chart should look like with the indicators configured:

Trading Rules

You can choose any underlying asset for trading. The optimal chart period is 5 minutes.

You can take shorter periods, but such schedules are considered basic. The term of the option is better to count on 3-5 candles.

Up and down contracts

There are quite simple rules for identifying market entry points:

• overbought, the trader should buy a short trade.
• In the case when all indicators are in the sector oversold, the trader should buy an up trade.

The overbought zone includes marks with indicators from 70 to 100, and the oversold zone includes marks with indicators from 0 to 30.

Naturally, this strategy has its nuances.: for example, triple filtering makes you not have many points to enter the market. However, as experts say, if you devote enough time and effort to work, then this strategy will allow you to achieve really good results.

I got this signal:

Immediately, I opened the corresponding trade with this broker for 6 minutes with the condition UP:

And here is the result:

You can see how the price went up right after the indicator signals. The strategy worked perfectly, and I got a 73% profit.

• The optimal broker for this strategy would be a broker, as it has fixed option periods that can be selected at any time. That is, from any second you can detect, for example, 15 minutes and not be tied to the exact time.

A large number of traders believe that the key to success in binary options trading is the creation of a complex trading system. However, as practice shows, this is not true. Genius often lies in simplicity. A prime example is a simple binary options trading strategy based on the popular RSI indicator.

The Relative Strength Index (RSI), also known as the Relative Strength Index, has been known among stock investors since 1978. It was then that J. Wallace Wilder presented this indicator for technical analysis to the general public.

The RSI is by its very nature an oscillator. Its main task is to determine the relative strength of the current market trend or movement in the price of an investment asset.

Initially, the relative strength index was used for trading on daily charts. However, with the advent of binary options, it turned out that RSI also works great on short timeframes. This discovery allows us to talk about the versatility of the tool in question.

The use of a simple and logically justified calculation algorithm, which underlies this index, made it possible to obtain a sensitive tool that accurately responds to price fluctuations. RSI generates signals that indicate that the persistence of stock exchange bulls (buyers) or bears (sellers) is already fading, but the value of the asset is still moving in the direction of the current trend by inertia.

How the strategy works

Currently, there are a couple of the most popular options for working with this indicator. We are talking about the breakdown of the trend line and the rebound from extreme boundaries.

Method #1

The first approach outlined involves the use of the following rules:

• an Up or Call position is opened at the moment when the RSI line leaves the oversold area;
• a Down or Put position is opened at the moment when the relative strength index returns from the overbought area;
• at the same time, the expiration period should be set at the level of the interval, which is equal to the duration of five candles on the quotes chart.

Using a similar technique, you can close most binary options deals in the black. The only existing drawback is the rigid binding of the trading signal to one or another level of the RSI indicator scale. Because of this feature, the trader is forced to ignore a large number of good entry points.

Method #2

The way out of this situation was found in a slightly different plane. Traders refused to use indicator levels 70 and 30 to receive trading signals. Instead, they began to work with tangent lines, which were built on the high and low of the relative strength index.

This is exactly what the second approach to a trading strategy based on the use of the RSI indicator looks like for binary options trading.

Trading using this method must be carried out in accordance with the following rules:

• as the calculation period for the relative strength index, we use the time interval, which is equal to 60 Japanese candlesticks (when using 60-second and 5-minute charts);
• as a downtrend, we consider a situation in which each next low of the price of an investment asset closes below the level of the tangent line;
• as an uptrend, we consider a situation in which each next low of the price of an investment asset closes above the level of the tangent line;
• binary option Up or Call we buy if the candle, closing above the level of the tangent, as if breaks through its line;
• binary option Down or Put we buy only when the asset quote remains under the rising line;
• the expiration period for concluded transactions is the same as in the first method described above.

In general, both approaches to a strategy that uses the RSI indicator for trading binary options are similar to each other. In both cases, the trader is trying to find a leading signal that will indicate a reversal in the movement of quotes. However, both methods have both advantages and disadvantages.

Pros and cons

Method #1 is suitable for trading any asset. At the same time, it is effective with any timeframes. It is highly reliable, but the generation of trading signals is extremely rare.

Method #2 allows you to get trading signals much more often. At the same time, such transactions are less reliable. In addition, it is focused exclusively on quote charts with timeframes set to 50 seconds or 5 minutes.

For trading on binary options, today the RSI indicator is increasingly used, which is one of the key oscillators used by traders around the world. This indicator shows the trader on the chart a certain “momentum”, namely, the amplitude and speed of price movement change.

Today we will tell you how to trade with the RSI indicator on binary options and look at several strategies.

RSI indicator for binary options trading. What is he capable of?

As you know, any profitable strategy for both Forex currency trading and binary options trading is based on the formation. At the same time, the market is so heterogeneous, and the number of signals issued by it is so large that the processing of all the information received from it without the use of automatic algorithms is an incomprehensible complexity.

Also, carrying out all kinds of independent calculations is not rational. While you will spend time on conducting a thorough analysis and making a forecast, the market will go ahead and the results obtained will no longer be relevant, that is, it is not advisable to use them when trading. Therefore, for options trading, traders often use a profitable strategy with.

The RSI indicator is able to determine market extremes (oversold / overbought) in real time, where the probability of price reversals is very high, as well as calculate the direction of the trend.

To put it simply, the strategy for options with the RSI indicator allows traders to analyze the stability or weakness of the price condition in the market.

This indicator is based on the use of prices that closed in a certain time interval, which gives rise to its high efficiency, time-tested.

As a result, a profitable strategy with the RSI indicator is applicable almost everywhere - for trading on binary options, and Forex and other markets and exchanges. In other words, RSI for binaries is just what the doctor ordered. An extremely popular, reliable and at the same time very simple indicator - what else do you need?

On the scale, the indicator is displayed in the range of values ​​0-100. The closer this value is to zero, the weaker the downward price movement, and the closer it is to 100, the less activity the upward price movement becomes. By default, the indicator takes into account prices for the previous 2 weeks (14 days), but this value can be changed in the settings if desired.

According to the creators of this algorithm, when the price movement is very fast and the indicator line rises rapidly, this indicates that the market has entered the overbought zone.

This means that the price in the very near future will "run out of steam" and begin to fall. In the opposite situation, when the RSI line is flying down, the market is entering the oversold zone. When the indicator value is greater than 70, it is overbought, when it is less than 30, it is oversold.

If the indicator line moves in the corridor between the values ​​of 30 and 70 (about 50), then there is no trend in the market and a neutral situation is observed.

All this is used by traders for option trading.

Binary options strategies with RSI indicator

Let's start with a classic binary options strategy with RSI. So, if the indicator line climbs above 70% of the level, this signals to us that the market has plunged into the overbought zone and we can buy.

With the downward movement of the indicator and reaching its 30% level, the market goes into the oversold zone, which means that we have the opportunity to purchase Put Option.

This is the simplest, but at the same time profitable strategy with the RSI indicator.

Profitable strategy based on the RSI indicator using options divergence

In this strategy with the RSI indicator, traders use such a concept - the divergence of price indicators from the indicators of the indicator. In the figure below, you can see how the price draws peaks, but the indicator of this trend does not confirm. There is a divergence here, which quite clearly heralds a market reversal.

The binary options strategy with the RSI divergence indicator is an excellent solution for short-term trading. Sometimes there are situations in which a reverse divergence is formed. At such moments, the price on the chart has already begun to turn around, and the indicator continues to build a strong trend line with the next peak or bottom.

If a similar picture is observed, it means that a strong trend is expected.

The fact that the current trend continues can be indicated by an indicator line with a clear direction (up / down), located between the 30% and 70% zones.

How to use such RSI indicator signals on binary options, see here:

Triple RSI strategy using the indicator. Description and trading of binary options

There is also a strategy for option traders called the Triple RSI, since it involves three RSIs at once with different periods. This strategy is another confirmation that the simplicity of the trading system is the key to high profits, even in short-term trading, where options are a complex tool that certainly requires maximum accuracy at the time of opening and closing positions.

So, as we have already said, this profitable strategy involves the use of 3 indicators at once:

• RSI (in value 5),
• RSI (in value 14)
• and RSI (in the value of 21).

We do not touch other parameters - we will leave them by default. So we get a combination of technical algorithms, devoid of the usual drawbacks inherent in all oscillators - false signals at short time intervals. Here, an indicator with a longer period will act as a filter for indicator signals with a shorter period.

And finding all three RSIs in the same area () is a strong enough signal to open an order.

The Triple RSI strategy can be used equally well for any trading instrument and any time frame.

But as practice has shown, the best options for timeframes are: the minimum is M1, and the maximum is M30 and H1. If you use large time intervals, then the signals will come very rarely.

The optimal expiration time (option completion) for this strategy will be 1 candle on the timeframe, that is, when using M5, we select the expiration time of 5 minutes. There are situations when the historical analysis of a pair of currencies at a selected time interval indicates that for greater reliability, the expiration time should be increased to 2 or even 3 candles.

There is also a modification of this system, which provides for the simultaneous purchase of two identical options, but at the same time with different expiration dates. Let's say one option is for 1 candle on the timeframe, and the next option is for 2 or 3 candles. Here everything will depend on the results of testing the history.

Triple RSI Strategy Signals

The signals for opening orders for the options strategy with the RSI indicator are quite simple and understandable.

• We open the PUT option when the lines of all three indicators enter the overbought area of ​​the market.
• The CALL option is opened if the lines of all RSIs are located in the oversold zone.

Examples in the pictures below. We leave the oversold and overbought levels as standard, that is, oversold in the range from 0 to 30, and overbought in the range from 70 to 100.

In practice, trading using this strategy looks like this: you watch the RSI (5) and after it enters the signal area, wait for the other two indicators to enter the same area. When all three RSIs are in the same zone, open an option.

This, I would say, is a rather profitable strategy, accessible even to beginners, however, there is an opinion that due to triple filtering it is not good enough, as it gives fewer signals than we would like.

We believe that this, on the contrary, is the advantage of the strategy, since more accurate and clear ones are much more important than in other markets, because the cost of a mistake is much higher here. Therefore, this strategy uses triple filtering.

Profitable strategy with the popular RSI indicator

The Relative Strength Index, like any other technical indicator, monitors the price movement and analyzes it. On the chart, it ranges from zero to one hundred. It compares the last high and the last low prices and provides this information to the chart. Here are the most commonly used rsi indicator signals for binary options:

• Overbought (level above 70) - the market has exceeded the normal level, which means that the price will soon go down, that is, opportunities for making purchases “lower” open;
• Oversold (level below 30) - the market has fallen below the normal level, which means that the price will soon go up, that is, opportunities for transactions to buy contracts "higher" open;
• Divergence - this signal is given if new peaks or bottoms on the oscillator chart diverge from the price chart readings. For example, if the new peak of the indicator is lower than the previous one. This indicates an upcoming trend reversal;
• Chart patterns are special patterns formed on an oscillator chart.

Best RSI Binary Options Strategy

Now consider, in our opinion, best rsi binary options strategy using the relative strength index. In the original it is called "15-minute RSI-4 trading system". It is compatible with any asset and is ideal for intraday traders. To implement it, you will need the following:

• Relative Strength Index (4,Close) with levels 25 and 75;
• Stochastic (5, 3, 3, low/high) with levels 80 and 20;
• Two charts with time frames of 1 and 15 minutes and set indicators mentioned above.

An “up” signal comes if on the 15-minute chart the Relative-Strength-Index closes above level 25, and the Stochastic closes above 20. Illustration (attention at 14:30):

If these conditions are met, you need to switch to a 1-minute time frame and buy an “higher” option with an expiration of 10-15 minutes, when the RSI on it is also above 25, and the stochastic is above 20. Illustration (attention to 14:39) :

A down signal comes if the index closes below 75 on the 15-minute chart and the Stochastic closes below 80. After that, you need to wait for similar conditions on the 1-minute time frame, and you can buy “lower” with an end time of 10-15 minutes.

Results

You can read more about such a wonderful indicator as the Relative Strength Index in our other article. Here we briefly reviewed its essence, effective signals, and also presented on the basis of this instrument, as well as another oscillator - Stochastic.

The success of this strategy directly depends on the careful implementation of all its conditions, as well as on your experience. Therefore, be sure to test it on a demo account before investing real money in it.

The RSI indicator - in other words, the relative strength index, which shows the strength of the current market movement in binary options. This algorithm is included in the basic package of MT4 and, like any of the oscillators, works as part of a sideways market movement.

The RSI indicator is a popular and simple algorithm used for binary options by most of the traders at the time. The operation of the indicator is based on the principle of the maximum and minimum of the traded instrument for the previous time interval.

Today, we will consider the description of this algorithm, its application, and also learn how it is configured.

RSI indicator - general description and practical application on the MT4 chart in binary options

How does the RSI indicator work? The calculations that the indicator for binary options produces give an indicator, taking into account the average price value, which is either lower or higher than others in the selected time interval. To put it simply, for example, if there were 10 candles in a 10-minute period, 6 of which closed above 4 others, then this predicts down in the very near future, or for its rollback. When the trend reverses downward, the situation is reversed.

In other words, the RSI indicator fully justifies the meaning of its name "Relative Strength Index", as it clearly expresses in percentage terms the strength of the market movement towards price reversals. And the stronger this movement is, the sooner it will dry up and a reversal will occur.

The logic of the obviousness of the forecasts that the RSI indicator for binary options gives out is manifested in the market impossibility to move constantly in one direction (up / down), since sooner or later a reversal is inevitable. Just such reversals are revealed by the oscillator we are considering.

If you carefully study the description of RSI, you can see that the indicator for binary options has two main areas:

• overbought
• and oversold.

So, the RSI indicator, or rather its chart, forms a line between the 70% and 30% zones, which are significant highs / lows of the price movement speed and displays the so-called "" by traders, that is, the amplitude and speed of price change.

As you can see, the use of RSI makes it possible to analyze the strength or weakness of the current state of prices in the market. The RSI indicator is based on its use of closing prices in a certain time period, and on the basis of this, the effectiveness of its work, tested by time, is born.

As a result, the RSI indicator has found its use everywhere when trading through MetaTrader - for real indices, options, currency pairs, for finding buy points for binary contracts within a trend, and so on.

Also, the use of the oscillator is relevant. In principle, the RSI indicator can be used in almost any option strategy, both as the main and auxiliary algorithm.

Description of RSI indicator signals for binary options

We have reviewed the description of the algorithm by which the RSI indicator works, now let's find out what signals it can give and where they can find their application.

The most accurate signal applied, for example, when trading turbo options, which is given by the RSI indicator, this is a divergence (divergence of the oscillator indicators from the price indicators).

In the figure below, you can see that while the price draws another bottom or peak, the indicator chart does not confirm this. We are seeing a divergence, which is a fairly accurate prediction of a market reversal.

For binary options, divergence is a great solution when trading short-term turbo options.

Important about trading turbo binary options using the RSI indicator:

The RSI indicator used in MT4 can indicate both a trend reversal and the presence of a trend itself. It happens that a reverse divergence is formed on the market, at the moment when a reversal process has already begun on the price chart, and the RSI indicator, on the contrary, builds a strong trend line with another trough or peak. If you see a picture of this kind, then this portends a strong trend.

A continuing trend can also be indicated by the indicator line, which is clearly directed down or up, and is located between the signal 70% and 30% lines.

As you can see, the use of RSI in MT4 is quite simple, but there are some nuances that you need to know about.

Especially attentive, it is necessary to be on downtrends.

During a long downward movement, the signals that the RSI indicator forms below the 30% signal line are often false, as the lethargy of market participants or the lack of demand causes the market to "roll" down by inertia. Such signals should be treated very carefully.

How to optimize the RSI indicator for binary options trading? Important Settings

We already know the description and application of the indicator, now let's look at how it is configured. First of all, before setting up the oscillator, it must be found in our MT4. To do this, open the application window and activate the "Indicators" tab, and then under the "Custom" category (here is our RSI indicator).

Click on the name of the indicator and exit oscillator settings window. In the "General" section, we leave everything by default:

In the column "Input parameters" the value of the period is adjusted. Initially, the default value is "14". If you work with increased market activity with highly volatile assets, then this value can be increased.

In the opposite situation, the setting of this indicator is reduced. All this is done in order to select false signals.

Further, in the "Colors" section, you can configure changes in the color scheme of the indicator lines for binary options. This is very handy if you use the RSI indicator on templates with different color charts.

In general, no one will bother you to make the indicator line black, which allows you to very clearly see the moments when the RSI leaves the colored zone.

In the "Levels" section, as a rule, the values ​​\u200b\u200bof 30 and 70 are indicated so that it is comfortable to watch. To do this, click on the "Add" button and enter the required values. A little lower (right in this window) you can select the color and style settings for the lines that will indicate the established levels.

In the "Display" section, the trader sets the timeframes on which the RSI indicator will be displayed. As a rule, by default, the oscillator is displayed on all time intervals.

After making all the necessary changes, be sure to confirm your actions by activating the "OK" button.

WORTH SEEING:
Using RSI with Bollinger in Binary Options