Double Stochastic: Binary Options Strategy with x2 Prediction Accuracy
Many strategies can give false signals when they are used in binary options trading for short periods of time. We recommend taking a closer look today at the Double Sochastic strategy for binary option. It employs the Stochastic indicator, specifically 2 Stochastics configured in a unique way.
What is Double Stochastic?
To get a trend reversal signal, the Stochastic strategy is often used. This signal highlights the start of a new trend formation which is a time when investing is at its best.
The default settings of the Stochastic indicator can sometimes lag in indicating the reversal points. It can give false signals for short periods, or it may be late for long periods.
This problem can be solved by the Double Stochastic strategy. It is described in the title , which uses two indicators instead one. The secondary signal will confirm that the main signal is correct.
Double Stochastic requires that you use two Stochastic indicators with different settings. This will combine short and long timeframes, and filter out false signals.
How to use Double Stochastic on the IQ Option platform
You can open two indicators simultaneously and have separate settings for each.
- The main indicator relies on long parameters: 21,9 and
- The auxiliary should have short values. 9,3,3.
To set the Stochastic indicator settings click on the Iconsicon at the bottom left corner. Then choose Stochastic from the list.
Modify the default parameters of the first indicator
Period K 21
Period D 9
Next, press Apply. The first Stochastic will be displayed on the chart.
You can repeat the steps of the second Stochastic by using the following parameters.
Period K 9
Period D 3
This is how the chart will look.
How to read the signals
If the indicators extend beyond the lower border below 20, it's a Buy signal. The red line should cross the blue one from below.
In this example, we see that the lines of first Stochastic intersect below lower border at the bottom of the downtrend. This signal is a sign of a trend reversal. We wait for confirmation from the second Stochastic. It crosses below 20 seconds later. We wait for the intersection candle to close and then we go for the BUY option. The current downtrend immediately reverses and the deal closes.
If the indicators exceed the upper border ( over 80), it is a SELL sign. The blue line must be crossed from below by the red line.
The lines of the first Stochastic cross above the upper border. This confirms that the signal is confirmed by the second Stochastic whose lines cross over 80. We open a trade right at the beginning of the downtrend, and we make an 87% profit.
Make sure you test the signal:
- Do not act until both lines cross.
- Wait until the candle is lit at the intersection.
If both Stochastics show the same signal, you can purchase an option in the opposite direction. These settings are best for short-term trades, making this strategy ideal for binary options trading that has a 1-minute expiration and a 5–15 second candle time.
Double Stochastic, a binary options strategy that uses two indicators, is very efficient for short time frames. Each indicator can have different settings which help confirm the signal and make better predictions, even though the time span is only 1 minute.
The strategy is easy to follow: simply monitor the chart and place a trade when the indicators cross over the upper border (SELL), or below it (BUY).
Best of luck!