Home / Strategy / 2. Basic / Binary trading strategy “Triple RSI”

Binary trading strategy “Triple RSI”

In this article, we look at the one of the simplest strategies – Triple RSI. Thus, even a novice trader can trade with it. It uses one of the most common indicators – RSI (Relative Strength Index) and you can find it integrated in some of the trading platforms. The presence of this indicator in your trading platform will make the trading process even simpler. If you don’t have it in your trading platform, you can easily set it up on the Real Time Chart (here), so to receive signals from it.

Triple RSI

Tuning of indicators

For this strategy we need three indicators «Relative Strength Index» (RSI) with three different periods – 5, 14, 21. To get the necessary indicators below the chart select the tab “Indicators” and click 3 times on the built-in indicator “Relative Strength Index “(RSI). It will place the needful indicators below the chart and after that, it is necessary to adjust the periods for indicators. By default, all three indicators have a period of 14 and oversold and overbought values are set to 30 and 70 respectively. We need to change only the periods for two indicators. Click on the “Format” and set the period for the first indicator equal to 5, and for the third – 21.

RSI-tuning

Rules for trading

For trading we recommend to use time-frames with periods of 5 minutes or more. 15-minutes time-frame can be considered as optimal time frame for trading, but the quantity of signals for this time frame will be not very big. However, a small quantity of signals for one asset may be compensated by the fact that this strategy can be used for any asset.

Here is the rules for trading according to this strategy:
1) When all the indicators are in oversold zone, i.e. below the level of 30 – we buy CALL option (“UP”)
Triple RSI - CALL option
Candle with RSI value below 30 showed with a blue line. After it close we purchase the option.
2) When all the indicators are in overbought zone, i.e. above the level of 70 – we buy PUT option (“Down”)
Triple RSI - PUT option
Candle with RSI value above 70 showed with a blue line. After it close we purchase the option.

Do not use!

This strategy cannot be used during strong economic news-releases. If you don’t know the strong economic news release time, read this article (link) (you may receive advance notifications about the major economic news-releases). The ratio of buyers and sellers on the market are dramatically changes during the time of such news. It can lead to imbalance of the RSI indicator levels. So, don’t use this strategy at this time.

Where to begin?

As usually, we recommend that you start with a demo account. If your broker has a demo account (or better yet, if there is a built-in RSI indicator), it is better to practice on it. If not, you can open a demo account with another broker. For example you may try IQ Option platform where you can practice on demo account with integrated RSI indicator.

Practice with IQ Option demo account

Check Also

Stochastic Oscillator

Stochastic Oscillator. Identifying Overbought and Oversold Levels

The Stochastic Oscillator is a momentum-type indicator that determines overbought and oversold positions. In other ...