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Advanced call options trading strategy using the Bollinger band indicator

Binary options’ trading is extremely profitable and capable generating stable income in the long run. The trained professional is leading a stable financial life by trading the financial instrument. They set their call option in the potential support zone and go for the put option in the resistance zone. Many professional traders consider the Bollinger band call options trading strategy as one of the best buying strategies in the binary options trading. So how does this system work? The answer is pretty simple. Bollinger band consists of three level of band, known as the upper band, mid band and lower band. The upper band of this indicators acts as an excellent resistance zone and the lower band provides strong support to the financial instrument. Option trader considers the lower band as the strike price for the call option to execute their trade.

Let’s see how the professional use the Bollinger band support in their call option strategy.

advanced-call-options-trading-strategy-using-the-bollinger-band-indicator
Figure: Price bouncing back from the Bollinger band support and triggering the call option

 

The Bollinger band always provides excellent dynamic support and resistance zone to the financial instrument. Professional expert traders wait patiently for the price to bounce back from that dynamic level before they execute their call option. It’s imperative to have a bullish candle closing above the lower Bollinger band once the price hit the band support. To be precise the band acts as the strike price for the aggressive traders whereas the conservative traders wait patiently for some fresh buying pressure before they set their call option.

In the above figure, the price hit the lower Bollinger band and eventually formed a bullish candle closing above the lower band level. The bullish candle acts as the trade confirmation signal for the options traders. This system works best in the long term prevailing uptrend. Under no circumstances, these call options trading strategy should be used during the high impact economic news release. Most of the time, the important support, and resistance levels are broken at the event of the major news release. Though the system is extremely profitable in binary options trading but traders are advised to follow proper risk management factors. As option traders, you must consider the fact that losing just another trading parameter that you can’t avoid in your trading career. Professional traders make sure that their winners are way greater than their losers. To be honest the most successful options traders are making huge money with this strategy just by using the trend following principle and executing their trade in the major dynamic support level.

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