Binary options Strategy: Stochastic

Looking for a binary options strategy that will bring you 100% profit? Forget about it! There is no strategy that will guarantee you correct signals for every trade you make. Moreover, if you search the internet, you will see that there are a lot of strategies that are super complicated and at the same time you will not see good results when using them (if for starters you manage to understand how to implement these strategies).

The binary options strategy that I offer you today is a relatively simple trading strategy based on the use of the technical indicator Stochastic. This is not a Holy Grail and it will not make you reach in one night. But what it can do is to bring you steady results and show profitability in the long term.

The Stochastic Oscillator

Basically, the Stochastic indicator measures the rate of change in the market price when price moves beyond its middle course, the stochastic oscillator will come into overbought or oversold area. Standard settings that most traders use and the ones I would recommend you, so you just need to add the Stochastic to the graph and no further set up is needed.

How to trade binary options using Stochastic?

Trading signals that we are getting from the stochastic indicator are relatively simple to interpret.

We have a signal to buy a PUT binary option, when the Stochastic is in the overbought zone (above the level of 80). Or buy a CALL option, when the Stochastic is in the oversold zone (below the level of 20). Below you can see an example of how this strategy work on a EUR/USD graph.


As you can see, there were two occasions in which the price of the EUR/USD got to the overbought area (above 80). These two occasions were signals of soon-to-be down trend. Each time we would buy a PUT option.

Example #1: At approximately 6:15 p.m. the price moved above its usual level price and entered the overbought zone, we bought a PUT option and made a profit.

Example #2: At 7:10 p.m. a second signal occurred on the market, the stochastic has entered the 80+ area, letting us know that the trend will reverse soon and the downtrend will occur. In this case, just like before we should buy the PUT option for EUR/USD.

Please note that this strategy is not bulletproof just like I said before. However, it brings about 75-80% correct trading signals, which is more than enough to make profit on binary options.

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