Last Updated on July 13, 2020 by Tim Morris
Divergence With Bollinger Bands Binary Options Strategy
Divergence is you will see the price is making higher highs but the indicator is making a lower high. This is if you are bearish. In a bullish trade, you will see the price making lower lows but the indicator is making a higher low.
This system works on a 5-minute timeframe with an expiry time of 60 minutes and 15-minutes with the expiry time of 180 minutes.
Metatrader indicators:
- ATM RSI Histo Triple Stochastic Divergence indicator;
- Fibonacci Retracement: XIT Fib indicator.
The price should be above the upper Bollinger Bands indicator in case of a bearish divergence and in the same manner the price should be below the lower Bollinger Bands indicator in case of a bullish divergence.
Bullish Divergence:
- If it is spotted on a 5-minute timeframe, it is a signal for “CALL” position.
- Call when the red bars of the indicator ATM RSI Histo Triple Stochastic Divergence retrace below the dotted black line.
- Touch points are the Fibonacci Retracement: XIT Fib indicator.
Bearish Divergence:
- If it is spotted on a 5-minute timeframe, it is a signal for “PUT” position.
- Put when the blue bars of the indicator ATM RSI Histo Triple Stochastic Divergence retrace below the dotted black line.
- Touch points are the Fibonacci Retracement: XIT Fib indicator.
This method of trading based on divergence can also be applied to Binary options strategies High / Low but this method of trading is not for beginners.
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