The Quotex broker platform offers wide opportunities for using new strategies, thanks to a significantly expanded list of indicators for binary options. There is no longer any need to switch to other terminals for technical analysis. One particularly effective strategy for binary options combines two indicators — the Relative Strength Index and Bollinger Bands.
This strategy is suitable even for beginner traders, as its rules are simple and clear. It can also be applied to all currency pairs and to other assets traded on the Quotex platform.
Remember that Quotex also offers all traders promo codes and bonuses that help you maximise your profits from trading binary options.
Adding and Configuring the Indicators on the Quotex Platform
First, let's briefly explain what each indicator in the Relative BB strategy does.
Bollinger Bands show the boundaries of the price channel within which the asset trades almost all of the time. A breakout can occur during a strong momentum move, but this does not happen very often — roughly one time in five. During flat periods, the price moves within a defined range and rarely leaves the channel. This means you can safely trade inside the channel, buying Put options when the price reaches the upper band and Call options when it approaches the lower band. Bollinger Bands work both as a trend indicator and as a timing indicator for option entries:
The Relative Strength Index (RSI) shows the relative strength of the trend and the probability of a price reversal. RSI is an oscillator: it fluctuates within a fixed channel between a minimum value of 0 and a maximum value of 100. When the indicator line falls below "30", the asset is oversold. When it rises above "70", the asset is overbought. Moving beyond these levels can signal a trend reversal:
It is worth noting that each of these indicators is effective on its own, and both have been used by traders around the world for many years. Many strategies are based on Bollinger Bands alone or on the Relative Strength Index alone. Another important point: when using these indicators, you should trade with the trend. Doing so significantly increases your chances of profitable binary options trades.
To add the indicators on the Quotex platform, click the indicator icon at the bottom of the chart and select the tools you need in the window that opens:
After adding RSI and Bollinger Bands, change the Bollinger Bands “Period” and “Deviation” values to “20” and “2” respectively:
The default values of the Relative Strength Index do not need to be changed:
Trading the Relative BB Strategy on Quotex
Once the indicators are in place, you can start trading by following these simple rules:
Buy a Call option when:
- The asset price has fallen to the lower Bollinger band.
- The RSI line was in the oversold zone (below the “30” mark) and is now breaking upwards out of it.
Buy a Put option when:
- The asset price has risen to the upper Bollinger band.
- The RSI line was in the overbought zone (above the “70” mark) and is now breaking downwards out of it.
Keep in mind that the RSI line will often hover near the “30” or “70” marks, which can also be used as a buy signal. However, for greater reliability, you should enter the market when the indicator's values are clearly below or above those levels.
The expiration time for the "Bollinger Bands + RSI" strategy is 5 candles.
Below is an example of a favourable setup for buying a Call option. The price touched the lower Bollinger band several times, and the RSI line dropped below "30" and started to rise. Although the first trade would have ended in a loss, the second would have closed in profit:
For a Put option, the opposite conditions apply. In this example, the price reached the upper Bollinger band and RSI crossed back down through the overbought level:
Conclusion
As you can see, trading with standard indicators can be profitable, provided that you follow the rules strictly. However, before you start trading on a live account, practise on a demo account, which is functionally identical to a live one — the only difference being that trades are made with virtual funds.
Also, never forget the golden rules of risk management and money management when trading any asset on Quotex. Following these principles will help you protect and grow your investments. Happy trading!
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