Categorized | Binary Option Indicators

How to Use Stochastic/RSI Indicator to trade Binary

The Oscillating indicators can be a good tool to use for binary option trading. These are the indicators that will show us whether the market is currently overbought or oversold.

Personally, I will recommend you guys to use the Stochastic and RSI indicator to look for overbought or oversold market.

First of all, let me tell you more about what exactly is overbought and oversold market.

When the market is overbought, it is a sign that the price has went up too much and it will do a correction by going down.

When the market is oversold, it is a sign that the price has went down too much and it will do a correction by going up.

So how do you use the Stochastic indicator?

When the stochastic line went above 80, it is a sign of overbought

When the stochastic line went below 20, it is a sign of oversold

STochastic overbought

So how do you use the RSI indicator?

When the RSI line went above 70, it is a sign of overbought

When the RSI line went below 30, it is a sign of oversold

Stochastic Oversold

However I am not saying that you should enter a HIGH trade immediately when you see the stochastic line going below 20 or RSI line going below 30.

You still need to make use of other indicators or entry conditions to help you locate the best entry point.

You can start formulating your own strategy based on these 2 indicators first and slowly add in other indicators or trading conditions to help you make more precise entry.

I hope that this post is useful for you guys who are looking to formulate your own strategy. Below is a post that I have written sometime ago regarding how to formulate your own strategy

/how-to-formulate-your-own-binary-option-strategy/

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