Binary Option trades generally last for a brief time, as they expire rather quickly; so it might be best to work with one hour charts. When a Binary Option rate hits the upper band, it is highly probable there may be a movement downwards towards the lower band.
The opposite is also true; this means that if your Binary Option asset price hits the higher band, you may trade down by selecting a Put Trade. For every time a rate reaches one of the two outer bands, it recovers its moving average depending on whether it needs to go up or down. When using a leverage, there is a possibility of losing funds, exceeding your initial investment.
This compares to the theory of moving averages, which Bollinger Bands permit day traders to follow a simple mathematical calculation. With practice and precision, it is highly possible to make a profit trading Binary Options with a Bollinger Bands strategy.
The reason Bollinger Bands have become so popular is their effectiveness, especially for purchasing and selling Binary Options and for understanding their trading signals.
View our Day Trader Guide of recommended brokers who offer educational classes on how to trade using Bollinger Bands.
At first, period X is set over a length of 20 days; however with binary options, Bollinger Bands can be measured over a short or long period of time, depending on what is needed.
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