If you’re interested in increasing your returns on Binomo as a beginner trader, a lot of professional traders would tell you that the best way to do this is to use a simple strategy. That’s because simple strategies also tend to be the most straightforward and easiest ones to follow for people who are still new to trading.
One of my favorite simple strategies is trading using simple signals like candle colors. Once you familiarize yourself with this concept, you’ll be able to use them to your advantage along with other indicators.
This guide will teach you how to trade using Bollinger Bands and candle colors in order to increase your returns on the Binomo platform.
How to Set Up Bollinger Bands on Binomo
Bollinger bands are a pretty popular type of indicators, not just on Binomo, but also in other trading platforms. That’s because they’re quite easy to understand and use for any trader out there. If you’d like to know more about them in general, you should take a look at our Guide to Trading with Bollinger Bands on Binomo.
Now, how do you set up Bollinger bands on the Binomo platform? Simply open the Chart Preferences tab on the left panel on your screen. Click indicators, and you’ll see Bollinger Bands at the 7th position on the list.
You’ll be given a list of financial products for the bands. The default settings are Close for field, Simple for moving average type, 20 for period, and 2 for Standard Deviation. Of course, you can change these settings based on your preferences, but for the purposes of this guide, I’ll them as they are.
Click Apply to save the changes. If you didn’t change anything in the settings, your chart should look something like this in the screenshot below.
How to trade using Bollinger Bands on Binomo
Your main objective when trading on Binomo using this indicator is to look at where the upper and the lower bands cross a candle, regardless of the color.
See, depending on the color and the specific band that crossed it, it means different things for your trading session. For example, if the upper band happens to cross a green candle, that means that there’s an uptrend coming soon. On the other hand, if the lower band happens to cross a red candle, that means the opposite thing: that a downtrend is soon going to happen.
You can use this knowledge in order to predict how the market will go next and determine what to do should it happen.
As you can see in this screenshot of my chart, the lower band crosses a red, or bearish, candle. I’m currently on a 1-minute interval. Since I know that a downtrend is possibly coming soon, I immediately enter a 5-minute sell position.
If the opposite had happened, say, the upper band crossed a green, or a bullish, candle, I would definitely enter a 5-minute buy position in preparation of the imminent uptrend.
How to trade candle colors alongside Bollinger Bands
Trading candle colors alongside Bollinger Bands on Binomo is easy. As mentioned above, you just have to see which band crosses which candle color. In the chart below, the lower band crosses a bearish candle with a 5-minute interval. Due to this, my trade entry point should be at the opening of the next bearish candle. I should also set my trade position to last for at least 5 minutes.
Doing this gives me a high chance of coming out with a winning trade. You can see that after that initial candle, 3 more follow its place. A 5-minute position is perfect in this case. If it was a 15-minute position, I would probably end up with a breakeven trade. That’s because my trade entry point is at the close of the bullish candle.
Tips for trading on Binomo using candle colors alongside Bollinger Bands
Once again, your main objective when it comes to using this strategy on Binomo is knowing where the two Bollinger bands cross candles. How long you hold your position, however, depends mainly on the time interval of your candles.
For instance, if you’re trading using the 1-minute interval or 5-minute interval candles, you should make sure that your trades last for 5 minutes, no more, no less. Any more than this is too long, and any less than this is too short.
Take a look at the chart below. You can see where the upper Bollinger band crosses a bullish candle. My trade entry point is at the close of this candle. If I had chosen a 10-minute position, I wouldn’t profit from this trade at all because the next bearish candle would close lower than my trade entry point.
Using the power of compounding to trade using Bollinger bands
You can also use the power of compounding to increase your balance when you trade using Bollinger bands on Binomo. My suggestion is to trade only 3% of your account balance using this strategy. So if you have $100 in your account balance, the most you should invest is $3.
A profitable trade at this point, including your return and initial investments, would garner you up to 20% return, provided that you won 3 trades.
Here’s a visual chart for reference:
Following trading psychology principles
One thing to remember is that you should always have a target profit in mind whenever you use this strategy, or any strategy, for that matter.
In the example below, the goal is to gain at least a 20% return on the initial account balance. Let’s say that was your goal for the week. Once you reach this goal, even if it’s only Tuesday, you should stop trading immediately. You can only continue once the next week starts. Why? Simply put, this helps you to not get too greedy. Sadly, greed is one of the biggest reasons why even the most talented trader fails sometimes.
Aside from that, you should also avoid placing two or more consecutive positions based on one candle alone. Bollinger bands are easy in a way that most predictions using them are correct, but that doesn’t mean they’re completely fail-proof. Don’t be tempted to enter another similar position just because of that. Remember that your trade entry point also matters greatly when using this strategy. Make sure that you only enter trades at the open of the next candle or at the close of the candle that the band crosses.
Trading using Bollinger bands and candle colors is one of the easiest strategies to use for beginner traders on Binomo, but that doesn’t mean you shouldn’t practice it anymore before moving on to the real deal. For best results, be sure to sign up for a free Binomo practice account first so that you can fully master this strategy!
Good luck on your trading journey with Binomo!