Welcome to the Binary Options Strategy section. Here you will find a beginner’s guide to strategies where you can find advanced information such as money management and articles on specific strategies.
Basic strategies for successful trading
Strategy is one of the most important factors in successful binary options trading. The rules of fund management, how to earn money in the market, etc. Is the framework on which trading decisions are based. Unfortunately, there is no single holy grail. Then we will all use it!
The most basic strategy categories are as follows:
- fundamentals
- Cunning.
The basic strategy is important to concentrate and understand the basic health of the company, the index, the market and the economy, but not as much as the binary options as the technical aspects of the trade.
Technical trading or technical analysis is a measurement of charts and price behavior, looking for patterns in those measurements and patterns and creating educated guesses, guesses.
The strategy facilitates the transaction, speculates that you do not have to select an item and reduces the overall risk.
The textbook definition is as follows: Action plans designed to achieve a goal or an overall goal, skills to plan and direct planning to achieve victory. The purpose of the transaction is to 1) make money and 2) not lose money .
The first way to achieve this goal is to use a rules-based approach to picking items that rely on old, tried and true technical analysis statistics. There can be dozens, maybe hundreds of ways to trade the market. It can be classified according to the tools used, the scheduled time frame, the amount of risk involved and in many other ways.
- Price behavior / scaling strategies – Strategies for price behavior is dependent on movement in the market. This trend can be long-term or short-term, and can take advantage of bullish or bearish positions.
- Trend Following / Directional Strategy – Trend following strategies target highly trending assets to determine a series of profitable items with high success rates.
- Range limit / short-term strategy – 99% of the market or individual assets trade within the high and low range, not the trend. These strategies focus on support and resistance levels, inversion and short-term trends as asset prices move from support to resistance and vice versa.
- Long-term / momentum strategy – Strategy aims for stronger signals and long-term duration, so the risk of the strategy is less. These signals are likely to succeed more, but they take longer to develop and take longer to deploy than other types of signals.
Technical analysis methods are usually mathematical formulas that translate price behavior into an easy-to-read visual format. Common types of indicators include moving averages, trend lines, support and resistance, oscillators, and Japanese candlesticks.
Money Management
The strategy is one of the two pillars of risk management and the other is money management. You aim only for good signals, remove obvious bad signals and invest too much money in one trade to control your risk without destroying your account.
Money management is the control of the total transaction funds. Explain deal sizing and long-term financial management so you can focus only on deals. A well-managed money management structure should simplify the following:
- Deal size
- Crisis management
- Future growth
- stress
Traders with a clear financial plan do not need to worry about whether they can trade tomorrow, whether the trade size is correct or how to increase their investment depending on the progress. All decisions are controlled by the management of the entire capital with a clear plan.
Learn more about managing your money.
Japanese Candlestick
This is the most common way to view price charts. The candlestick jumps across the chart in a way you can’t with another chart style, making it easy to see prices, open to high prices and cigars. It is the basis of most price action strategies and can be used to give signals and identify other indicators.
Read more about candlestick strategy
Support and Resistance
These are the price areas where the price is likely to stop if the price on the asset chart is reached. If the price stops falling, you get support. This happens when a buyer enters the market and says “support price”. If the price stops rising, resistance is found, which occurs when the seller enters the market or the buyer disappears and ‘resists at high prices’. Often characterized by a horizontal line, this is a good target for items and possible areas where price action can be reversed.
Trend line
These lines connect the highs and lows formed by asset prices. A series of high lows and high highs is considered an uptrend and indicates that prices are likely to rise, low highs and low lows are considered downtrends and that prices are likely to fall. The trend line can be used as an object of support and resistance and as an entry point for the trend according to the strategy.
Moving Average
The moving average takes the average of the asset prices for X days and then plots it as a line in the price chart. Moving averages come in many forms and are often used to determine trends, provide targets for support and resistance, and indicate items. There are dozens of ways to derive moving averages, the most common of which are simple moving averages, exponential moving averages, and volume-weighted moving averages. It can be used in any time frame and can be set on any time frame to provide multiple time frame analysis and crossover signals.
oscillator
The oscillator is possibly the greatest single indicator indicator used for technical analysis. This includes MACD, Probabilistic, RSI and many other tools. These instruments typically combine price status and moving averages to determine market conditions. This tool is presented as a stand-alone tool and is usually represented by a line between or between two extremes or midpoints to determine trends, direction, support/resistance, market strength, momentum and entry signals.
Transaction Psychology
In all forms of trading, psychology can play a big role. A lack of confidence can lead to missing out on a deal or investing too little capital to win a prize. At the other end of the spectrum, overconfidence can lead to overtrading or increased risk.
Therefore, the trading psychology of traders is very important. It can also be actively controlled or managed (at least recognized). Areas of trading technology are often overlooked, but there is time to consider.
Read more about psychology trading and learning through experience.
Basic Binary Options Strategy
Here are some basic rules of a binary options strategy:
- Trend is your friend, take the trend next to the article.
- In an uptrend, enter only if the price is close to support, and in a downtrend, enter only if the price is close to resistance.
- Wait for the confirmation of the candlestick signal when the price is closer to support / resistance.
- If the candlestick signal appears, the bullish cross of the uptrend or the running cross of the downtrend becomes until the stochastic and/or MACD is confirmed.
- If rules 1-4 are met, start a transaction and use only 3% of the account in each transaction.
- Use 2XCandle length when choosing expiration. IE, if you use 1 minute seconds, 2 minutes expire, 1 hour seconds, 2 hours expire.
- If the deal fails, investigate why it didn’t work, adjust if necessary and move on to the next transaction. If the trade works, it goes to the next trade.
Best broker
No strategy is profitable if you trade with an unreliable broker. These are the best trading platforms we recommend to try your strategy.
Choose a trading strategy
Developing a trading strategy for the binary options market requires a great understanding of the workings of the market with the understanding of the available trading agreements, the different maturities and the behavior of individual assets.
The profit option market is unique, unlike the forex market, which requires assets to be moved in one or the other by a significant number of pips before the trader makes a profit. In addition to the up/down trading, which is based on direction and mimicking the trading requirements of other markets (except for the pipe movement), other trading types in the binary options market function in completely different ways. Different platforms have different trading agreements. Some binary options contracts do not require the trader to correctly ask for the direction of the asset. For example, trading an OUT contract will require assets to meet one price limit or the other to earn money. Therefore, the trader must be able to identify the appropriate trading contract that allows him to create the appropriate strategy. The one used to trade up and down contracts is different from the one used for in/out contracts. The type of contract determines the strategy.
For example, trading up/down contracts requires a strategy that can determine whether an asset is bullish or bearish. To trade in/out contracts, you need a range strategy or a small trading strategy to identify when an asset stays in or out of range. If you want to develop a trading strategy for trading in/out, this is how your mind works.
There are tools to help traders when developing strategies based on the type of binary options to be traded. This is where chart patterns , signal services and technical indicators for candlestick will come. Simple tools like the pivot calculator can be used as part of a very effective sales strategy for results. With these tools, you can move on to the next step in choosing a strategy. This is how you understand and set the expiration time.
Understanding Expiry Times
Expiration time is very important for binary options because every trade in this market has a time limit. However, not all binary options trades require a time limit. Trade as traded up/down must expire before you know the trade result. In contrast, a transaction, such as the OUT component of a limit transaction or the TOUCH component of a High Yield Touch or Touch / No Touch trade contract, must not reach maturity until the trade results are known. If the trader bets on the TOUCH result before expiration and the asset reaches the strike price, the trade result is already known and the trade ends with a profitable trade.
Therefore, if a trader is not good at setting expiration days/dates (and the trader cannot always boast of the expiration of the market), the trading strategy for binary options must be adapted to the trading contract. It doesn’t depend entirely on the expiration.
By identifying and separating trades that do not rely on maturity, you will gain a better understanding of what strategy you are looking at.
Understanding the behavior of assets
The binary options market combines assets from different asset classes into one market. These assets do not work the same. Some assets are very volatile because they fluctuate throughout the day. A very clear example is gold. Some binary options assets are not traded 24 hours, only at a specific time (eg stock index). The factors that can cause a sharp change in the share price index will not be the same in terms of commodities or currencies. Even within the same asset class, no two devices operate identically or identically.
Therefore, understanding the behavior of assets is important for developing trading strategies for the market. It is up to the trader to study the behavior of an asset, understand the technical and fundamental indicators that will affect the behavior and price fluctuations of the asset, and then create a trading strategy that is appropriate for the asset.
demo
This section shows you how to apply all the above parameters using a simple but effective trading strategy.
– The strategy we are going to use determines price bullish / bearish and therefore trades a Call / Put contract.
– Trading strategies with an hourly chart leads to the expiration of one hour. We do this with the understanding that the effect you want to trade on an hourly chart occurs within an hour.Try to use it on assets that are fluid and responsive to strategy. So we use EURUSD.
This strategy was used to create color-coded indicators that show green arrows on bullish signals and red arrows on bearish signals. This currency is aimed at trading EURUSD, because it is very responsive to price stimuli during the London / New York overlap in the forex time zone and can provide a response in less than an hour.
Once the red arrow appeared, the signal was to exchange the PUT option into the Call / Put digital option. Using this signal, the transaction was executed on a binary options platform. The price of the asset (EURUSD) fell within an hour from the generation of the signal to the expiration date, which gave us a favorable trading result.
This strategy (custom strategy) met all the conditions.
a) It was suitable for trading contracts in the binary options market.
b) It was a strategy to allow traders to use the appropriate maturity.
c) it was appropriate for the behavior of the asset, and above all, the strategy was beneficial.