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The Go-to Guide for Binary Options Trade Strategies
If there’s one thing that matters most in binary options trade, it is a well devised strategy. With a great strategic approach, you can ace binary trade market in no time. One of the ways to describe a great strategy in binary options is that it’s a signal that consistently generates profit. But what constitutes a “great strategy” …in simple terms it would be the one that brings you more profit as opposed to loss.
In Binary options trade the strategies are used to identify recurrent trends, so a trader can step forward with a great expected profit margin. In this guide we are going to overview different types of strategies, so you can jump-start on working towards developing one of your own.
What Do You Need for a Good Strategy?
In order to come up with a binary strategy for binary options trading, you must merge three sub-strategies…that include, a trading strategy, an analysis strategy (for improvement) and a money management strategy. All three components tend to a specific aspect of binary trade for you. Let’s review some very specific examples.
Strategy # 1: The 60-Second Expiries
This strategy is also known as a one-minute option strategy. To incorporate this strategy, you must find resistance levels and support aspects in the trade market where the short-term bounces occur. For this purpose, Fibonacci retracement levels, as well as, Pivot points would prove to be very useful. Furthermore, you are to take the trade set ups on the very first touch of a level. In situations where you are working with high-noise assets, taking a higher trade volume might actually go to your advantage and the 60-second trade strategy falls into this type.
Now, understandably to maximize gain from this strategy a trader might increase trading frequency in order to counter the underlying noise in this trade strategy. As a word of caution, you must never carelessly trade all instances of resistance and support. In all the instances, keep the price action, direction of trend and overall momentum in your consideration.
Strategy # 2: Momentum Strategy
The speed of movement of an asset’s price is what we term as ‘momentum’ in binary options trade market. Since it’s an inherently technical indicator, Momentum could be a good or bad news for the traders. In order to work with this strategy, you must be well-familiar with the computational methods for momentum (i.e. absolute, relative and process oriented).
As a binary options trader you can utilize the boundary options and momentum indicator to maximize gains. Boundary options primarily define about two target prices, one of the price values would be below the market price while the other one would be above it. The great thing about this strategy is that both the price markers are equidistant, and the moment market touches one of them, you get to win your option! This strategy saves you from market upheaval and makes the direction of market movement quite irrelevant to your ‘winning’.
Strategy # 3: Five-Minute Strategy
With this strategy the binary options trader has an expiry of 5 minutes. Although there could be various options when it comes to this strategy, you can always narrow down your choices by keeping two points in mind; firstly, the market must not be moving randomly (like on short time frames) and secondly you should have the option of doing a lot of trade within a day (this would increase the earning prospects).
What binary options software and signals providers use 5 minute strategies? At this point, just one, and it’s a system we’ve created called Binary Today 5, you can check it out.
The first 5-minute strategy is to trade the MFI (money flow index) extremes with low and high options. When the trends are long-term ones MFI usually stays in the underbought or overbought areas for long and fundamental influences gain a strong hold during these times. While during shorter time frames, fundamental influencers lose their significance. Another 5-minute strategy is to trade the news. When an important news chunk strikes the market, you would often witness a strong market reaction, and this is where you can take advantage.
Strategy # 4: The Rainbow Strategy
This strategy is a combination of simplistic signals and sophisticated predictions and it is best suited for the traders who are looking to maximize the profitability by employing a successful strategy. This strategy is a crossover strategy with 3 moving averages. The idea backing this strategy is that moving averages that make use of several periods take less influence (or the reaction time is long) from the price fluctuations, as compared to the ones that utilize few periods. As a binary options trader you need to act when several moving averages are stacked in the right way. When the averages stack in the right order, you can either invest immediately or wait for a period or wait for more than two periods.
Strategy # 5: The End of the Day Strategy
Well, it does sound very mysterious and certainly is quite interesting binary trade strategy. With this one, you can locate great trading opportunities with a substantially limited time investment. It basically, informs a trader about the signals that can be used and the time frames during which they should be on the look out for a signal. With this strategy, the assumption is that the best trading time is at the end of a day.
Strategy # 6: The Expiry Strategy
For this strategy the very first thing you must do is to identify what is your signal (i.e. stochastic crossover, candlestick pattern, trend line bounce, momentum shift or a combination). After that you get back to the charts and then locate all such signals (time frame is quite irrelevant at this point). You need to identify strong and weak signals. Once you are done with that, you can then count the bars that are needed for a signal to show movement into money; and then you can simply average the bars that are required. With the averages computed you get to have a base line expire for a signal. With this strategy you get to have a safe duration to make trade decisions.
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We have shared all the basic strategies of binary options trade; however, the smartest binary traders understand that to really compete and succeed in the binary options trade market, it is important to devise your own strategy that is absolutely customized for your business.
Share with us in the comments below, some of the strategies that have worked for you. Or, any strategic roadblocks that you have encountered on the way.
Binary Options Trading Strategy – Best 60-Seconds Strategies
Today we are going to share our binary options trading strategy with you. This strategy is designed to help you identify whether you’ll like trading binaries and teach you how to trade binary options the right way. If you prefer to play it safe over gambling, you’ll need a strategy or tactic to help you master binary options and other trading activities. This is where our TSG team comes to the rescue. We will provide you with the best binary options strategy.
The main reason we’re interested in learning about trade binary options is the fact that binaries simplify what we’re already doing in Forex. At the same time, binary options also allow us to make more money in the process. We are also controlling the risk.
Binary options are easy to understand. This is coming from someone who has little or no experience in the area. If your favorite approach to trading forex is to jump in on a fast price movement and ride the intraday trend for as long as the momentum lasts, you can learn how to make money trading binary options very quickly.
When we first discovered binaries, the light bulb in our heads turned on. We figured out the same thing that we’ve been doing in Forex can be done. But walk away with 75%, even 95% winning trades because we only needed to get the direction right. No need to worry about how many pips we could grasp in the process.
And that, my friends, is the real beauty of binary options.
What are Binary Options?
Binary options are a form of derivatives that have a fixed profit or loss. Trading binary options is simple. All you need to do is ask yourself a simple yes or no question. Will the price of the underlying asset be worth more than the strike price at the expiration date?
Now, let’s start by understanding how binary options work.
Essentially, we can trade binary options for any type of instrument. Whether it be commodities (Gold, Oil or Silver), Forex exchange currencies (EUR/USD, GBP/USD or USD/JPY), or stocks (Amazon, Tesla or Twitter).
So, the first thing you need to decide upon is to select the asset to trade.
Second, before submitting our trades, each of these instruments has a current value at any given point in time. How to trade binary options depends on our trading skills. It is used to predict where the current value will be some time in the future. In other words, we must use our skills to predict the market direction. This will determine our success in trading binary options.
The market can only go up or down. If we believe the current value will go up in the near future, then we buy a Call option. On the other hand, if we believe the current value will go down in the near future, we buy a Put option. Read more about call options vs put options.
Third, we need to determine what the most critical aspect of trading binary options is. The expiration time will ultimately determine if you’re making a profit or not.
Trading binary options require you to correctly forecast two things:
- Whether the market will rise or fall.
- Your forecast needs to be accurate during a certain time frame – called the expiration time.
If you’re right on the market direction by the time of the expiration time, you earn a profit. Being wrong means you incur a loss. The way binary options works is that if you’re right on the market direction, you’ll get a percentage of what you initially invested in.
Typically between 75% and 95% and in some cases, even 100% of your initial investment, depending on your Binary Options Broker.
Supposing we’re wrong on the trade, then we’re going to lose the whole amount invested in the short term.
We have made a nice infographic that highlights the four steps on how to master binary options trading.
Now we’re going to focus on step two, which is how to predict the price movement. If you manage to figure this out, then knowing how to make money trading binary options will be a piece of cake for you.
Now, before we’ll outline a method on how to make money trading binary options, we always recommend taking a piece of paper and a pen and take notes on the rules of the best binary options strategy.
In this demonstration, we’re going to look at the buying Calls.
The Best Binary Options Strategy
Our team at Trading Strategy Guides is ready to share with our beloved trading community our 60-second binary options strategy. We don’t just hope this strategy will make you money, we’re certain it will. The mathematical model behind this binary options trading strategy has a proven market edge.
The only tool you need to trade binary options successfully is the RSI indicator.
Even the RSI indicator is not good enough if it doesn’t have the “right” settings. The RSI default settings need a little bit of adjustment if you want to master the 1 minute time frame. We use a 3-period RSI to trade binary options profitably.
Naturally, a lower RSI period means that the indicator will tend to be noisier than normal. But it is more responsive to the immediate price action. Along with the RSI settings adjustments, we also played around with the overbought and oversold readings. We found out that by using an 80 RSI reading for overbought and 20 RSI reading for oversold condition, we get more accurate day trading signals.
*Note: Make sure you adjust the RSI settings before you jump into the binary options trading strategy.
By changing the RSI overbought and oversold line, we have eliminated the noise. So now we’re ready to highlight our binary options step-by-step guide:
Step #1: Find an instrument that is showing a low the last 50 candlesticks. Use the 60-second chart (1 Minute TF)
The 1-minute binary options or the 60-seconds time frame is the best chart for trading binary options. In other words, the best binary options expiration time is the 60 seconds time frame.
We recommend highlighting the starting point on your charts. And the ending point of your 50-candle low that you have identified. Simply draw two vertical lines on your chart through the starting point and ending point of your 50 candle low.
When you count the 50 candle low, you should always start from the current candle. Then go from the right side of your chart to the left side of your chart. If you manage to count 50 candle low, obviously the starting candle point will be your 50 candle low.
Moving forward, it’s time to put the RSI indicator in use and spot if we have extreme oversold reading or not.
Step #2: At the moment the 50 candle low develops, we need an RSI reading of 20 or below
Since this is a reversal trading strategy we need the RSI indicator to show a bullish reversal signal. An RSI reading below 20 shows that the market is in oversold territory and it can potentially reverse.
In our example below, the 1-minute EUR/USD chart is satisfying the two conditions.
Keep in mind that in order to move to the next step, we need the 50 candle low. We also need an RSI reading below 20 to happen at the same time.
We added one more factor of confluence that needs to be satisfied. If used in conjunction with the previous two conditions, it will make you a money maker binary options trader.
Step #3: Look for a bullish divergence to develop between the RSI indicator and the price.
When trading reversals, you need to be as precise as possible. The more confluence factors you have in your favor the more accurate the reversal signal is.
What we need to see here is for the price to continue moving lower after the 50 candle low was identified. At the same time, we need the RSI indicator to move higher in the opposite direction.
If the price moves in one direction and the momentum indicator moves in the opposite direction, it means they are diverging from each other. This signals a potential reversal signal.
Now it’s time to highlight how to find the right entry point for the binary options trading strategy.
Step #4: Buy a Call Option after the first candle that closes above the high of the 50 candle low
The first thing you need to do is to mark on your chart the high of the 50 candles low with a horizontal line. The first candlestick formation that breaks above this high is your trade entry signal to buy a 60-second Call option.
It’s that simple!
After you decide the amount to invest and pick the 60-seconds as your expiration time, it’s time to sit back and wait 1 minute before hopefully collecting your profits.
Step #5: You collect your profits if the next candle closes higher than your trigger candle
If at the expiration time, the price is higher than the price you opened your Call binary options, you’re lucky because you’re about to check-in a big payout.
For example, if you’ve invested $1,000 and your binary options broker offers you an 85% payout, it means that you accurately predicted the outcome of a trade. You get back your initial investment of $1,000 plus the 85% payout which in our case is $850 in profits.
If you want to buy Put binary options, use the same binary options guide, but in reverse.
Conclusion – Binary Options Trading Strategy
Before learning how to make money trading binary options you need a great Binary Options broker. You can’t start hitting home runs right out the gate without making sure you have a binary options broker who wants you to succeed. Secondly, you need a strategy based trading technique to reveal the market direction. You only need to forecast if the price will be up or down during the next 60 seconds, making it very convenient.
We use a heuristic approach to speculate on which way the price is going to move during the next 60 seconds. At the end of the day, traders are looking for a reliable binary options system that will help them make money from trading.
The good news is that the best binary options strategy is exactly that system. Our team is built of many traders with experience in the industry, including binary options traders who know how to make winning trades. We’re ready to help you with every step of the way.
Thank you for reading!
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Don’t forget to read our guide on regular options trading for beginners here.
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7 Binary Options
Binary Options Trading Requires Very Little Experience
The common misconception is that binary options trading and forex trading can only be done by one that has a certain amount of experience in the area. There is no requirement to have any previous experience in financial trading and with a little time, any skill level can grasp the concept of binary options trading.
The basic requirement is to predict the direction in which the price of an asset will take. The price will either increase (call) or fall (put). Successful binary options traders often gain great success utilizing simple methods and strategies as well as using reliable brokers such as IQ Option or 24Option.
From this page you will find all the relevant strategies for binary options trading.
Get started with 3 easy steps:
Choose a broker from the list below
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