Creating strategies for binary options coincides with the general approaches in stock trading. But the peculiarity in the form of time restrictions on transactions and the presence of brokers ' own trading platforms, leads to the need to make mandatory changes to existing algorithms.
When looking for new systems, the trader needs to look for simple strategies, given the limited selection of technical indicators in the terminals of binary options brokers. The trader should lay down the universality of the trading system at the stage of its search.

The Martingale Roulette Strategy

Martingale is a strategy adopted by Forex traders and most trust managers on PAMM accounts. This is an increase in the bet on each new binary option, if the previous one made a loss.
Traders trade a binary contract, of the type "Above/Below" in one pre-selected direction, coinciding with the trend, which is determined using one or two moving average indicators – Moving Average (MA). This type of technical tools is present in every broker terminal.
Classic trend detection using two moving average indicators:

  1. A trend is considered to be growing if the "fast" curve from below crosses the" slow " line of the indicator and remains higher. The "speed" is determined by the values of the period – the smaller it is, the faster the MA readings change.
  2. If the fast curve is higher, crosses the slow line with a long period and remains at the bottom, it is considered that the growth has been replaced by a falling trend.

The rule for determining the trend using a single moving average:

  • if two candles or bars closed above the MA curve, the trend "went up»;
  • The falling trend is determined by two candles (bars) with closing prices below the MA line.

Candle-a time period of price fluctuations, graphically expressed in the form of:

  • tails (minimum and maximum);
  • body-the interval between the instantaneous price values at the beginning and end of the time period.

Period – the number of candles or bars, the values of which are used to calculate and plot the indicator curve.
The above parameters are selected empirically by the step-by-step search method in order to identify the highest performance (profit) of the trading system.
Common values of periods are considered to be the values of: 2; 9;14; 30; 50;100; 200.
Recommendations and ready-made trading systems collected on MA can be borrowed from the works of Larry Williams, Alexander Elder, Bill Williams. Often, binary options use a ready-made strategy on moving averages, called "Guppy".

Trading during the news release period

Common conditions for obtaining a premium on binary options are directed price movement in a certain direction, going out of the range, touching a certain level. To accurately predict these events, it is necessary to guarantee a strong price fluctuation of the market.
The news of the economic calendar is pre-known events, as well as the strength of their influence on the market. The problem is that upcoming events can not always give an idea in which direction the trend will develop after their release.
The trading strategy is to open a trade a few minutes before or after the release of significant news. The power of influence is determined by a mark in the economic calendar, usually using a three-point system.
The wagging of the event on the price can be found in the annotation, and the forecast direction can be taken based on the value previously calculated by analysts. The strongest changes in quotes occur within 15-30 minutes after the news release. Sometimes the main impulse is placed in the first five minutes, so the expiration time of the contract is limited within these limits.
The preliminary values do not always coincide with the actual ones, then the price goes in the opposite direction. To increase the probability of earning, traders use "touch" options, with the condition of crossing any of the boundaries located above/below.

Discrepancies (uncorrelation) in pairs with major currencies

The list of major currencies is defined by the International Monetary Fund, where they are marked as funds in which states can store gold-foreign exchange reserves. In the Forex market, they account for the largest number of transactions, because the importance and demand for these tools is related to the strength of the national economy.
Major currencies: EUR; GBP; AUD; CAD; JPY; CHF.
According to the Jamaica Agreement between the G-7 countries, the exchange rate of national currencies is equal to the US dollar and is quoted on the Forex market in the form of pairs. The same base in the form of USD and the roughly equal strength of the economies of developed countries makes the pairs of major currencies move in the same direction. This is called correlation, which often causes the" laggards " of this movement of the pair to catch up with the rest.
Traders use divergences (uncorrelation) by buying binary options Higher/Below the lagging currency pairs. The classic strategy algorithm looks like this:

  • two currency pairs are selected – the leading one, as a standard of direction, and the slave one, on which transactions are carried out when quotes diverge;
  • the time format of the candle display is determined, usually 5, 15 minutes, and it also determines the expiration time.

Common "bundles":

  • EUR/USD-master, GBP/USD-slave;
  • AUD/USD master, EUR/USD slave.

Other options are possible, with the exception of using USD/JPY. If the pair is inverted, such as USD/CAD, USD/CHF, etc., then use the inverse correlation, making transactions when the movement of quotations coincides.

Night trading

The "Asian" session has the phenomenon of low volatility (spread of price fluctuations) in currency pairs that are not related to the Asia-Pacific region (APR). Traders use this feature to trade on currency binary options of the type – "Range" ("Spread" or "No touch"), in which the premium is paid out if there is no price exit for a certain zone.
The strategy is called "night", as it takes place in Moscow time in the interval 22-00 -01-00 Moscow time, before the opening of the New Zealand and Australian exchanges.
Before applying the strategy, you should find out whether the broker works with the selected currency pairs during these hours. Some companies impose a "liquidity limit", refusing to trade during inactive periods, in their view, which often fall during the "night trading" period.


The divergence strategy is based on the divergence of indicators, such as "oscillators", and the price movement. It boils down to buying options of the "Above/Below" type, when the highs or lows of the market are not confirmed by similar values on the curves of the technical analysis tool.
Oscillators are indicators that are limited to the maximum values of the range-0 and 1 (0-100%). The calculation formulas of these instruments are based on the ratio of the current range (minimum–maximum) to the extreme price values reached during the period set by the trader. Therefore, the quotes and the curve of the indicators coincide in the maximum and minimum values.
The resulting discrepancies in the readings of the oscillator and prices in 80% of cases indicate a future reversal of the price against the current trend. This means that the trader knows in advance the future direction of movement and can predict whether the quotes will go higher or lower.
Before using the strategy, it is important:

  1. To choose the type of oscillator that would give" unambiguously interpreted " divergence signals. It is desirable that these are the MACD and RSI, which are widely used in the platforms of brokers.
  2. Determine the historical period of time at which the lows and highs are determined, for example, for three sessions, up to a maximum of one day.
  3. Choose the timeframe (time period) of the candle-as much as possible limited to an hour.

The strategy works on all underlying assets, the option expiration time is selected equal to two or three candles, the signal frequency is increased by reducing the timeframe.