The today’s article is dedicated to probably the simplest authorial strategy for the binary options’ trading. Its simplicity consists in a fact that it is based on only one indicator that is the Relative Strength Index.
It may become the news for skeptics, but in order to get profit, it is not necessary to apply systems based on the generous amount of different tools. The Triple Confirmation trading strategy, despite its simplicity, is a very profitable tool which allows earning even in the short-term trading. And it is truly known that this type of binary options is the most inconstant and requires the pinpoint accuracy in operation. If you want to know about other strategies which allow working with different expiration time you can familiarize with them in the respective section of our website.
Setting the system
As mentioned above, the Triple Confirmation trading strategy is based on the application of RSI. And as the trading platform we will use the live chart for binary options that can be used on a free basis on our website.
So, we add three indicators with the different periods of prediction on the platform. These values are 5, 14, and 21. Therefore, we get the versatile tool which is deprived of disadvantages of the common oscillator. The truth is that three different periods act as the filters, which don’t allow opening the position, if at least one of them didn’t reach the certain value. This is a very important point because in this case we can avoid trading with losses. It is the most important for a small periods which are peculiar for their generous amount of signals that don’t have the highest percentage of capability. But if these signals are filtrated, then their capability grows substantially.
We change only the indicated values in the applied tools, and we don’t change other parameters. It mainly refers to the market levels which are set on the 30 and 70 levels for all indicators of triple confirmation.
Application of triple confirmation trading strategy
Here we will consider the main principles of trading. Firstly, it must be mentioned that you can use any underlying asset for work and time on chart for analysis is 5 minutes. Of course, you can also use less time, but the 5-minutes charts are basic here. Another important point you have to pay attention to is that we are considering the short-term strategy. It assumes buying binary options for 1-3 candles. The ideal action is buying of lot with 1 candle, but sometimes you can find some modifications of this strategy in which a trader buys two binary options at the same time. The first one has the expiration time in 5 minutes. The second one has the expiration time in 15 minutes.
Rules applied for the determination of the entry points to the market are fairly simple and are expressed in the following way:
- If all indicators of the triple confirmation are located in the overbought zone, it is needed to a buy binary option for reduction (PUT).
- If all indicators of the triple confirmation are located in the oversold zone, it is needed to buy binary option for raise (CALL).
The marks of 70-100 for oversold and 0-30 for overbought are regarded as these levels. The example of such system can be explained in the following way. Initially, the RSI (5) analysis is conducted. If it is located in the signal zone, we have to look at the RSI (14) and wait until it appears in the same zone. After this, it is needed to wait until the RSI (21) indicator enters this range, and only after this we can a lot in the respective direction. You can see the screenshot below, and it shows the triple confirmation trading strategy.
In this article we have considered the classic conception of the triple confirmation trading strategy where a binary option is bought for one predicted level, which amounts to 5 minutes in our case. And we see that all signals worked off very good and brought profit. Of course, such triple filtration makes this strategy fairly effective, but, at the same time, it provides a small amount of entry points into the market. Some traders take it as a disadvantage, but we enter into a market not for a few minutes, but for the long perspective. If you devote enough time to a trading, then the offered system will allow you to attain really good results.