Binary Trading Strategy for Oil

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Contents

The price of oil is a critical global economic factor, which means that trading is influenced by political and commercial concerns. In general, higher oil prices tend to undermine economic growth as this increases travel and shipping expenses, which increase inflationary pressures. If the price of oil remains high over a long period, the cost of downstream products like plastics and fertilizers are affected as well.

Crude oil

Among the most commonly traded product is oil. Crude oil is a naturally occurring petroleum product commonly used in energy production and manufacturing. It is typically purchased with the intent to be refined into everyday uses such as diesel, gasoline, heating oil, jet fuel, plastics, cosmetics, medicines and fertilisers. As such its price has a dramatic impact on the global economy. It is traded in high volumes all around the world.

In line with the world’s standard, there exist two major classifications of crude oil, and different platforms trade each. US oil is referred to as West Texas Intermediate (WTI), and UK oil, called Brent Blend oil. The WTI is considered light with low sulphur content, is used commonly in US. The light density coupled with less impurities makes WTI oil a sweet crude oil, meaning it has a low density, and is more economical to refine and transport. Typically to demonstrate its worth, it trades higher at a dollar or two to Brent. The Brent Blend although not as light as the WTI is a sweet crude and contains approximately 0.37% sulphur. Being refined in Northwest Europe, it is used in production of petrol and middle distillates.

For example: at expiry time 12:00 GMT the old contract closing price was at US$35.50 per barrel and the new contract price is trading at US$40.50. At expiry, the old deal will be closed automatically at US$35.50. Any profit or loss will be reflected in the margin and thus in the free balance. You have to give special instruction to the dealer, and so the dealer will open a new deal at a price of $40.50 (the price of the new contract at 12:00 GMT), and place an amount equal to the remaining margin on the old deal, unless you provide other instructions.

Oil Trading Binary Options

Crude oil futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of crude oil (eg. 1000 barrels) at a predetermined price on a future delivery date. Forex platforms now provide ways for you to trade into oil futures, without actually having to trade the futures themselves, and thus avoiding the necessity of ultimately taking delivery of the oil which is a concomitant of the futures trade..

Traders everywhere would easily be lured towards it. It is after all a very influential element of the global market. It is greatly affected by the supply and demand thereby trade opportunities are basically always present. The only challenge is to know the right time to trade and where to go. If these problems will be solved, your bank account will always be full. As mentioned before, a lot of factors influence oil and with binary options you can have more gains when the prices go up or go down just as long as you can identify where it is heading. That is what the US Oil Trading System will try to achieve.

How oil trading works

To understand this fully you need to have basic knowledge trading binary options commodities. However this strategy is quite easy to grasp and fully works. Technically, it is a strategy that follows trend. It uses two indicators to recognize trend and retracement which will then be succeeded by trend resumption. This means that price may strongly move in a single direction and then it moves towards the opposite side. Once the first direction resumes, you then enter a trade. In order to achieve this, US Oil Trading system makes use two custom indicators specifically TCCI. This is an indicator that is based on Moving Average. The other indicator is called the Oil Biz where and arrow is placed at your point of entry. The two indicators are readily downloadable. Here is how it will look when you add it:

Necessary Indicators:

  • TCCI Indicator
  • OilBiz Indicator

When you download and install it, you will see a Meta Trader 4 terminal. On the chart you will see the TCCI. It will look like a moving average that comes with changing colors. You will see the arrows near the Oil Biz indicator. For trading according to this strategy you may need two indicators to have the same color. The strategy’s author persists on a certain condition that is a bit complex to understand especially for a novice trader. The author noted that when the TCCI turns green on the two sides of the candle that is when a trade is finally confirmed. Additionally, the bur arrow must be up or both sides of the candle must be red with an arrow. The strategy also denotes that sometimes TCCI changes on similar candles where the arrow shows. This will appear that the candle’s half matches up to the TCCI’s green zone and a half to its red zone. These signals need not be traded. This will be easily understood when you see the charts yourself.

Advantages of Oil Trading Binary Options

  • The great thing about this strategy is that it is very user friendly and back test.
  • It’s so easy especially when indicators will not re-paint.
  • Chart signals may look good however you can see much better results.
  • If the results are not that good, nothing can compete with a constant strategy such as the US Oil Trading System.
  • Thereby, it is all right to gain losses just as long as your in the money trades are more than you’re out of money trade.
  • This will surely happen regularly. It may not be true that huge money can come quickly but once they come they will be very promising.

Disadvantages of Oil Trading Binary Options

  • You may have used dozens of indicators but you may notice that only a few stand out.
  • When you try to use a promising strategy such as TCCI or Oil Biz you can see a different view on trading. With this, you may not feel too comfortable with such strategy using indicators that you have not heard about.
  • There may be some repainting issues but it can be a major problem.
  • Moreover, there it is possible that there is an additional trend filter necessary because the arrangement of the strategy is not so good.
  • With it arrangement, you may be trading retrenchments and not trend resumptions.

The Bottom line

So it is very important, when trading oil on your forex platform, to be aware of any restrictions or time limitations that may apply. But clearly, the ability to gain such easy access to this fantastically liquid and fast-moving world market is a terrific opportunity for traders.

This system was created for trading related to oil or oil futures which allow traders to manage their money in a better way. It also allows traders to go for higher ratio in risks to rewards. This goes to show that traders may lose two trades and can make up for such losses with just one winner. However, this luxury cannot be attained in Binary Options not unless initial trades are double. However, this is something that you should not do. This may not be the most appropriate strategy but its power can come from the idea that it makes use of good risk to reward relation.

image courtesy: binaryoptionzone

Binary Options Trading Strategies

Opportunities in flat or volatile markets.

You have undoubtedly heard, binary options offer opportunities in all market conditions. And that they do. From up or down trending markets to flat or range bound markets and even to the most volatile or whipsawing markets there is a strategy using binary options.

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It is very important though, to understand which strategy to use in each situation and in every event, you should have a well thought out strategy for every market condition.

Before we dive into the basic strategies for binary options, it is important to reiterate that binary options are not a different market, they are simply a different way to express an opinion about the same markets you already love.

Whatever analysis or indicators you are using to signal moves, or lack of moves, in the market now, are the same you would use for binary options. Additionally, as with any type of trading, even before having a sound strategy, you need to employ sensible money management.

That part is perhaps a bit easier with binary options as you always know the maximum risk up front, before the trade is placed. If it doesn’t meet your risk tolerance, don’t take the trade. If it does, then determine what type of market it is and if you are willing to place the trade or now.

So, let’s look at a few different binary options strategies for different market conditions.

Binary options strategy #1 – Flat markets.

A flat market is defined as a market demonstrating very little directional movement. For most types of trading this can be very frustrating as it provides almost no opportunity.

With a binary option, because of the non-linear nature (meaning the price of the binary option can move, even if the underlying market does not) of binary options, this can provide great opportunity.

The key point to remember here, a binary option will always settle at 0 or 100, there are no other outcomes.

In flat markets, traders will tend to buy binary options which are well in-the-money (options trading over a price of 50, often a price of 70 or more) and sell binary options that are well out-of-the-money (options trading under 50, often at a price of 30 or lower) with the goal that time erosion, rather than price movement in the underlying market will push the price of the option toward their ultimate goal of 100 or 0. This is very similar to what is called a premium collection strategy in traditional options.

In this strategy, traders are putting up more capital to make less, and are willing to do so as they believe the probabilities of a positive outcome are in their favor.

Binary options strategy #2 – Volatile markets.

Volatile markets, as one can probably conclude, are the opposite of flat markets. These markets are typified by wild price swings, often of a magnitude several times larger than under normal conditions. Just as a market in this condition is the antithesis of a flat market, so also is the strategy required to trade.

In volatile markets, binary options traders will typically look for a lower risk to higher reward strategy. They are estimating that these large swings can take a deep in-the-money binary option, out-of-the-money quickly, and vice versa.

In this strategy traders may look to sell binary options at a price of 70 or greater and buy binary options at a price of 30 or lower.

With volatility being the key to this strategy, moves can come quickly and just as quickly reverse. Because of this characteristic, experienced traders will often not look for the ultimate payout of 0 or 100, but will utilize limit-orders at various levels to take off a full or partial position and lock in profit, before the market turns against them.

No strategy is perfect and all trades are unique. The above outlines the basics of how strategies for different market conditions can be implemented; however, this is just a first step and it is the responsibility of every trader to fully understand their strategies and follow their trading plan on every trade.

For more detail on these strategies, and many more strategies for binary options, register for an upcoming webinar, or check out our archived webinars covering a wide range of topics and strategies, from basic to advanced.

Binary Trading Strategies 2020 – Best Binary Options Strategy

Developing binary options strategies can be a very difficult task if you don’t know what you are doing. This is why you should be practicing your method for quite some time before the live account gets going. There are several things you can do when it comes to a strategy. Learning everything you can about the markets you want to trade is the first and foremost part of the process. Without common knowledge of the asset you want to trade the likelihood of it working diminishes greatly.

What does it take to create a winning strategy? First of all, it takes a lot of dedication. Developing simple binary options trading strategies is a key to success. You may put in hours upon hours of time into making a working method. The key is not to get discourage if you aren’t successful at first. During the development you will learn the markets so well, that a hidden gem may pop up and save you. Keep pushing to find one that works. Also, don’t try and find or build the holy grail of binaries. The odds of this are zero. There are no sure bets in trading or safe harbours. All you need is a better winning percentage than losing. We’ll break down some of the things to help you get started on you strategy development process in our binary options trading school.

Binary Options Trading Strategy

If you are a better than average trader and can understand the markets this is where you want to start. You feel like you’ve watched the markets for some time, and you are ready. You must think about what might work and might not work. Rule out all the garbage so you don’t waste your time. Take a look at what you’ve done so far.

Are you a short-term or long-term trader? Are you looking to take 60 second binary trades or daily? Bring all the information to the table and then go from there. Once you have this you can start picking the assets you want to trade. Look for patterns on the charts (trading with candlesticks) or use indicators to help you decide. Price action is your friend so make sure you include that as well. You have a lot to consider. After a while things should come together for you to start testing. If you find something that has potential, you must backward and forward test. You’ll be happy you did before real money is at stake.

You need to pick a broker where you will apply your strategies from our binary options brokers list. Be sure you do not find a random broker or an offer you mysteriously received in your inbox. You can check out the IQ option platform, which is the best trading software in our opinion. If you reside in USA you should read our Nadex review.

Copy Someone Else’s Strategy with a Binary Options Robot

Don’t feel bad copying another traders work with binary options robot. Take a strategy you found in Binary Options University or in a book and do your own testing. Be sure it works the way the developed says it does. Again, test and test some more. This will help you over the long run. If you find some success after a while you can then bring it to the IQ Option trading platform. Over time you will see if it is successful or not. Again, don’t get down if it doesn’t work. This is a long process.

Free Binary Options Trading Strategies

If you are feeling really good about your fundamentals of binary trading skills, you can take someone else’s strategy and make it your own. The strategies we suggest to apply are all free binary options trading strategies. We do not charge you to use our website and large portfolio of websites. You can apply a moving average or some kind of trading indicator to help rule out the noise. There is so much you can do to an existing strategy to make it that much better. Don’t try and reinvent the wheel if it is working. A lot of times people tweak methods and make them worse. This leads you to believe the original strategy isn’t good. You can always change what you have, but remember you won’t know for some time if it is good or not.

Test the Binary Options Trading Strategy

As mentioned above, this is probably the most important part of developing a strategy. Testing it can save you tons of money. We would say time, but the fact is it takes time to practice and make it right. Some have tried to trade with binary options robot where others have been chasing higher binary options payouts via touch no touch binary options.

How do you test a strategy? Easily, all you have to do is open a 24option free demo account or alternatively use the binary.com app and you are well on your way. You of course need the charting software to manage the price action. Bring the two together and you are well on your way. No matter if you are using indicators or just plain price, you have to put it to work and see if you get a decent winning percentage.

4 Simple Binary Options Trading Strategies

One of the biggest differences between binary options trading and simple gambling comes from the fact that gambling requires little or no strategy and is based more on probability and “luck.” Options traders rely on more complicated approaches, however, but formulating a strategy can seem incredibly difficult in the early stages. Here, we will look at some of the factors to consider when you are developing your strategies in order to ensure that they meet your investment needs and allow you to use your strengths to maximize gains.

1: Selecting Your Time Frames

One of the first factors to consider is the trading time frame, and it can be argued that this is even more important for binary options than it is for other types of trading. This comes from the fact that your trading time period must be outlined before the actual trade is even open.

Selecting your time frame will depend on a variety of factors. What type of trader are you? How much time (on a daily basis) do you have to devote to managing your trades (and in looking for opportunities)? Do you prefer a fast-paced approach (such as those seen in 60 Seconds options)? Or a more conservative, long term approach (using weekly or monthly options expiries)? Are there any economic events (such as an interest rate decision or corporate earnings release) which will affect the performance of the trade?

All of these factors must be addressed when defining the parameters of your trade, and the results here will vary from person to person.

2: Selecting Your Binary Trading Assets

The next element in formulating your strategy is to decide on your trading assets. Do you have a strong knowledge base for a particular asset type? If, for example, you have a firm understanding of the stock market (and are able to interpret earnings statements) it will make sense to focus your attention on those markets. Alternatively, if you have a strong understanding of macroeconomics (constructing trades with economic data), you might prefer to focus on commodities or currencies.

There are factors that have a special influence on each these asset types, so it will be important for you to be able to actively trade during those events. For commodities, this might include events like the weekly inventories report in oil, whereas in currency markets it will be important to monitor the markets when major central banks are conducting their meetings.

3: Technical Analysis or Fundamental Analysis?

After you have decided on your trading assets and time frames, you will need to determine your forecasts for price direction. To do this, traders will either work from technical (chart) analysis, fundamental analysis (a study of economic reports), or some combination of the two. If you tend to be more skilled in areas of math and probability, you will likely be better suited for chart analysis. For the more “right brained” trader, this time might be better spent assessing recent economic data that is likely to influence the prices of your asset.

Most traders will use a combination of these two strategies, waiting for a major economic event to generate an overall bias (for prices to move either up or down), and then use technical chart analysis (using price charts) in order to decide on exact price levels to establish the trade. This can be helpful in increasing the probability for a successful trade, as it ensures your trade is supported by economic data and asset valuation.

4: Use Strengths When Formulating a Binary Options Trading Strategy

Formulating your binary options trading strategy can seem like a daunting task. To be sure, forecasting the future prices of an asset is complicated. But when we break down the process into its component parts, the process does start to look attainable. Most of these elements will be based on your investment needs.

Do you want to be an aggressive trader (higher risks and rewards), or do you want to take a more conservative approach (extending your trading time frames)? Fortunately, the markets have evolved in ways that cater to traders of all styles and investment goals. So, no matter which avenue you choose, there is an accompanying binary trading strategy that can be matched to your trading character.

10 Tips for Winning Trading Binary Options Strategies

Strategies are an extremely important part of trading. Some binary options trading strategies are proven to work extremely well, while others may be shared with others prior to being fully tested. The following 10 tips can be used regardless of strategy and trade type. Each of these can help prevent substantial losses and should also help in the accumulation of higher levels of profits.

1:Never test a strategy by investing any amount that will make it difficult to absorb a loss.

Trading does involve risk and no strategy can place the trader in the money 100% of the time. Only invest amounts that equal a small percentage of your total account funds. Your binary options trading education is important to remember while trading.

2:Money management skills should not be ignored when using strategies.

The same principles of fund management should still apply regardless of whether the trade is extremely basic or strategy-based.

3. Be patient

When investing smaller amounts in order to test strategies, don’t expect to generate substantial profits. Patience is a virtue, and having this trait will allow for reasonable trades to be made while important skills are gained.

4: Never force any trade, regardless of how desperate you are to test a strategy.

Market conditions must be considered, and analysis should be completed. Profits most often come from waiting for the right trade and then purchasing a contract. Forcing a trade is never a good thing.

5: Remain aware of financial economic data releases each day.

These can greatly impact the price of an asset and could easily render a binary options strategy useless at times. Monitor financial news at all times in order to avoid a high number of losses. Be sure you can get your money out if you win. Avoid trading with brokers on our binary options scams blacklist and instead be sure using the cashier like olymp trade withdrawal or other respected trading platforms.

6: Watch for stagnation in price movement.

It is not uncommon for asset prices to remain very stable just prior to announcements being made in regard to them. Once the latest information has been processed by investors, the asset price should quickly begin moving again. These period could either be problematic or advantageous when using certain strategies.

7: When using strategies to trade currency pairs, capitalise on time frames when liquidity is at its highest.

This is often the time period when the London and New York markets overlap and are both open for business at the same time. Other market overlaps also occur and could prove to be excellent trading times for currency pairs.

8: Always note the outcomes of trades made using strategies.

Doing so will allow you to quickly determine which strategies are most effective. It will also allow ineffective strategies to be eliminated.

9: Regardless of strategy type, when several losses occur in succession, stop trading temporarily.

This time away can be used to re-evaluate the ever-changing market and adapt to current conditions.

10: Be willing to accept that some trades will end out of the money.

Emotions will play a role in trading. By being willing to accept loss as a part of the process, it will be much easier to press on and make the changes needed in order to profit more often than not. You need to learn itm and otm meaning in finance.

Strategies are too important to be ignored. New traders will want to make use of the most basic methods before moving on to more advanced methods. With time will come an understanding of how strategies are developed and how to alter existing binary options strategies so as to render them even more effective.

CONCLUSION OF BINARY TRADING STRATEGIES

The truth is, there is no holy grail trading system. If you can create one, please let us know. However, there are strategies that work that are available now or just waiting to be created. Figure out what type of trader you are during this phase and try to develop the best method possible. Use your binary options demo account wisely and don’t force any real money into the creation process. Once you have a good sign, run with it and see what it can do for you. If you have something that works over time, then you are in great shape.

Conclusion:

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Best Binary Options Brokers 2020:
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    Good Choice For Experienced Traders!

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