A Strategy Based On The RSI Indicator

The use of the RSI indicator as a highly effective means of forecasting when working on the binary market is the most effectively rational way to profit on binary options. This automatic algorithm has many forms of building and settings functionality that allow you to evaluate the different time periods of the market, which leads to the generation of more accurate and efficient signals. We offer a strategy that uses a combination of leading RSI indicators. This format of trading system allows the trader, in a safe and comfortable mode, to receive market positions with positive expirations at a rate of more than 85%, which maximizes the dynamics of capital gains.

 

Trading system on the RSI indicator – technical conditions

The effectiveness of the strategy depends not only on the very system of indicators or the market conditions, but also directly on the technical parameters of the operating terminal on which the player is carrying out their trading processes. To ensure the effectiveness of the strategy based on the RSI indicator, we need a platform on which the following trading and technical functionality is available:

  • A technically functional set of indicators
  • A wide range of trading assets
  • A chart with the optimal range of timeframe settings
  • High accuracy of asset market liquidity
  • Bet expiry periodicities ranging from 1 to 30 minutes
  • Broker trading conditions with the minimum parameters

After analyzing the main trading platforms on the brokerage market, we can offer as a recommendation the professional proprietary terminal from the Binomo broker. This operating tool has the most advanced functionality for binary trading, which contributes to the efficient use of trading systems:

  • A functional, professional set of automatic indicators
  • A list of 80 underlying assets
  • A trading chart with timeframe intervals from 5 seconds to 5 minutes
  • Quotes of a high level of accuracy
  • Bet expirations ranging from a minute to a day
  • The Binomo broker’s conditions have the best minimum parameters – initial trading investments from $10, market bets with binary options from $1

So, our principle of market analysis is built on a combination of 2 RSI indicators which have different settings for building form periods. For the practical application of the strategy in binary trading, using the indicator set on the Binomo brokerage’s platform, configure on the chart of any financial asset the RSI 10 indicator with standard configuration of levels and the RSI 20 indicator with 50 as its only trend level. After this configuration of the operating chart of the underlying asset, you should get the following markup format:

A Strategy Based On The RSI Indicator

Thus, we get a technical strategy template that allows us to evaluate the market in two periods, allowing you to maximize the accuracy of the trading signals. The choice of timeframe for the analysis is determined by the trader according to their own preferences. For our demonstration, we are going to use the most optimal trading timeframe of 1 minute.

 

Strategy based on the RSI indicator – signals to trade

To carry out binary bet operations UP, the trading system generates a clear and understandable signal of the following configuration:

  • On the leading RSI indicator 10, the moving average, after reversing from level 20, builds a clear trend upwards
  • On the technical RSI 20 indicator, the line of trend movement intersects the level from downwards to upwards

Strategy based on the RSI indicator - signals to trade

To carry out binary bet operations DOWN, the trading system generates the opposite format of technical signals:

  • On the leading RSI indicator 10, the moving average, after reversing from level 80, builds a clear trend downwards
  • On the technical RSI 20 indicator, the line of trend movement intersects the level downwards

Strategy based on the RSI indicator - signals to trade

The statistically more efficient bet expiration range when working on this combined RSI strategy is the time period during which 5 to 10 quote candles form on the trading chart. It is rather simple to calculate this factor when following this rule and taking into consideration the quote chart timeframe used in trading.

 

Money management

During practical tests the system showed average performance indicators at the level of 87%. Thus, completely avoiding financial losses is not possible. In order to decrease the losses and risks associated with trading on the binary market, follow these rules of money management:

  • When working on a minimum account, use trading bets of the initial cost
  • For trading capital amounting to more than 100 USD, you can use trading bets that cost no more than 5% of the amount of capital available for trading

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