5-Minute Trading Strategy

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Trading on 5-minute binary options contracts can be very tempting for traders and the reason for that is clear – quick profits within a short period of time. But it is not so easy to find profitable strategies for trading short-term binary options contracts. This situation happens because on shorter time-frames, it is way harder to estimate and determine the price action rather than longer time-frames. One of the ways out of this situation can be Bollinger Bands which let traders minimize trading risks as well as increase their efficiency and profitability. 5 minute trading strategy works best of all in such a market environment that is characterized by flat horizontal Bollinger line.

How to Set a Chart

As it was mentioned above, this particular strategy uses only one indicator – Bollinger Bands. Bollinger bands are usually set with their original settings. The preferable period is -5 minute chart.

Call-entry should be done under the following conditions:

  • Market should be with a limited diapason and Bollinger bands should be almost flat;
  • The price should touch the lower Bollinger band;
  • Wait for a closing of a current candle and only then make a Call Order;

Put-entry should be done under the following conditions:

  • Market should be with a limited diapason and Bollinger bands should be almost flat;
  • The price should touch the upper Bollinger band;
  • Wait for a closing of a current candle and only then set a Put option;

The Best Assets for 5-Minute Trading Strategy

As you understand, best of all this strategy works in tending market diapason. In such a way, any asset, the price of which is within this diapason can be traded. Yet, don’t forget that it is important to trade liquid assets because the profit comes from the price movement. The best liquid assets in binary options are such currency pairs as EUR/USD, GBP/USD and gold.

When is the Best Time to Trade?

5 minute trading strategy can be used anytime when the market fluctuates. Basically, it is considered that the best time is when there is not liquidity as well as little volatility. Such conditions can be met during New-York and European trading sessions.

Pros:

+the strategy is easy and quick for understanding as it is based on just a few simple rules;

+ the strategy lets traders earn to 20 trades a day on 1 asset only;

+ signals have a very high quality which increases the chance for the right decisions and consequently profitable positions;

Cons:

  • The only con is that it works only within the market limits, which means that traders miss profitable opportunities when the market is in trend;