For this technique with a 30-minute expiry for binary options, we will use the best indicators:
Each candle will have a Time-Frame of 15 minutes.
In this technique with a 30-minute binary options maturity, the Bollinger Bands are used, an essential tool to understand whether the market is in the lateral phase or not.
The Bands of Bollinger were invented by John Bollinger, they have the characteristic to contract and extend and observing the interaction of the price with these Bands, we try to predict its movement.
Usually when the Bollinger Bands are very tight, that is narrow, you prefer not to invest, because the price fluctuates in a narrow range of values, while when they are extended, you can enter the market.
When Bollinger Bands are extended there is a high (or strong) volatility, while when they are contracted there is a low volatility.
The simple 14-period moving average calculates the values using the formula of the arithmetic mean; for example, the 14-period moving average calculates the arithmetic mean of the last 14 closing values. In this technique the average will help us to understand whether the price is going up or down.
The RSI indicator was created by Wilder in 1978, it is an oscillator, which moves in a range of values from 0 to 100. It is widely used by professional traders with a period of 14 bars as advised by its founder. To use the RSI indicator, two thresholds of values, 70 and 30, are defined.
If the oscillator, oscillates below 30, it means that the price is in oversold, while if it oscillates above 70, it means that the price is in oversold.
The ADX indicator indicates the strength of the trend, but not its direction. If the indicator is between values like 10 and 15 it indicates that the market is in flat, that is that it moves very little, while if it is between values between 16 and 25 the market is in trading range, that is, the price fluctuates between a series of values.
If the ADX is between values like 26 and 40 it indicates that the market is in trend, while if it is above 41 the market is in hyper trend. Usually you enter the market when the adx is in trend.
For this technique with 30-minute binary options expiration, we will invest when: the Bollinger Bands are sufficiently wide, so with high volatility. We will invest upwards if the average crosses the green candle, from bottom to top. We will invest downward if the average crosses the red candle from top to bottom We will enter the market when the RSI indicator is oversold or overbought i.e. crosses the line of 30 or 70. The right side shall be in trend above the 25° line.
In this graph we have two market entry points in uptrend with a maturity of 30 minutes. In the first situation the waves are wide, the adx is in trend and the RSI exceeds the level of 70. The green candles are at the top of the 14-period moving average and the first candle was also crossed by the average.
This uptrend has a duration of 2 hours, so it's all very well with an expiration of 30 minutes. In the second situation the adx is in trend, the Bands are widening after a phase of contraction and the RSI exceeds the level of 70. The green candle is crossed from the average to 14 periods and the uptrend lasts even more than 30 minutes.
The same situation, but on the contrary, must occur for a down trend, where the RSI will exceed the level of 30 i.e. it will signal that the price is oversold.
The basic rule for using a moving average is as follows: when the moving average is cut upwards, a bullish signal is generated; when it is cut downwards, then a bearish signal is given.
For the technique with 30 minutes expiry for binary options, as mentioned above, we will use the moving average set at 14 periods, let's see what this choice consists of. When you choose a moving average, you need it to be appropriate for the time period you set for your trading: a short term one is suitable for short term trading; a medium term one is suitable for position trading.
When the moving average line intersects with prices, it produces the typical operating signals:
Before constructing a moving average, you must decide the period, which is equivalent to the number of prices, or bars, considered for the calculation. In the case of daily bars, the period corresponds to the number of days, or sessions, on which the calculation is made. In the case of intraday bars, the period includes a time span that is equal to the period itself multiplied by the timeframe.
Since the value of a moving average is insignificant, a comparison should be made with:
As a trend indicator it can be said that the moving average also works as a resistance/support that accompanies the price movement and works as a trailing stop (i.e. a level of dynamic stop-loss that follows the trend in the market). In periods of high volatility, the moving average moves away from prices, allowing you to follow the movement without closing positions early. When quotations slow down their rise or fall, the moving average approaches and tries to capture the moment in which the market reverses its direction.
The Relative Strength Index (RSI) is widely used by analysts who want to invest in trading, especially those who trade in Forex, the futures market and stock markets. Please note that this article can be converted into PDF and used as a practical eBook. After having carefully verified its application with Bollinger Bands, we see its functioning in other contexts as well.
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