60-minute Binary Options Trading Strategy based on Bollinger Bands and Momentum

For this strategy we will utilize the Bollinger Bands and the Momentum indicator. For a detailed overview of the Bollinger Bands, you can read the article in our Forex Academy, while more information on Momentum you can acquire here.

The time frame is set to 15 minutes, while the expiry time is 60 minutes (a four-candle expiration time). The Bollinger Bands should be set to default (the middle band is a 20-day Exponential Moving Average, while the upper and lower bands represent two standard deviations from that average). The Momentum indicator should be set to 11 periods (by default it is 12 periods).

In order to make trading decisions, one needs to take into account the following conditions:

If he/she is to buy a Call option:

1. The price of the trading instrument needs to move above the middle band and
2. the Momentum indicator needs to inhabit the area above its 100.00 level

If he/she is to buy a Put option:

1. The price of the trading instrument needs to move below the middle band and
2. the Momentum indicator needs to inhabit the area below its 100.00 level

You should note that the two conditions must be present simultaneously, before you make your entry. In case there is a cross above the middle Bollinger band, but the Momentum indicator still remains below its 100.00 level, you should abstain from placing your call option buy order. In case there is a cross below the middle Bollinger band, but the Momentum indicator still remains above its 100.00 level, you should abstain from placing your put option buy order.

BinOpt with BB and Momentum

On the 15-minute chart of NZD/USD above the small triangles indicate where a call entry should be made and where the expiry is.