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3 Binary Options Trading Strategies For Beginners
Note! If you are new to binary options and different strategies please go to our strategy page where we cover the topic comprehensively!
If you’ve studied and understood my previous posts about the fundamentals of binary option FX trading and binary options indicators, you are now ready to trade for real. Here are 3 different strategies that I use, choose one based on your risk appetite. Good luck!
Conservative Long-term Strategy
This strategy is for those who are new to this game and want to build up their capital slow and steady. The point of this strategy is to minimize risk and wait for the perfect setup on the chart.
In this case the perfect setup is using the ZigZag’s last 2 points, and draw a Fibonacci between them in the direction of the trend.
Draw your fibo from point 1 to point 2 for a down trend, and vice versa for an uptrend. Your target is 161.8 projection level.
In order for the signal to be fully valid, there has to be a retracement to between 50 – 88.6. Higher the retracement goes, stronger the signal. In the example above, the retracement happens next to the number 2 in the up left corner.
They key here is to be patient until all 3 factors line up.
The entry rule is:
– Price hits Fibonacci projection level 161.8.
– Price is inside or outside of the bounds of the red channel.
– Value Chart hits level 8 or above
Your Expiry can be between 5 and 20 minutes. And your target is 1-2 trades per day.
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And money management suggestion for this strategy is to take 2 equal bids per day for 20 days. Increase your position by 50% next day. If you lose, start with the last set of bids:
Day 3: 21 + 21… and so on. You should reach around 5k in profits within 20 days, and next month just start over or carry on from where you left.
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The semi conservative strategy involves 4-6 trades per day. The rules are the same as for the conservative strategy, only with one exception: We take the trade at Fibonacci projection level 127 as well as 161.8.
Now, for level 127 trades, I would advise not to take the trade with more than 6 minutes to the expiry. This is because usually level 127 represents a consolidation level to draw buyers/sellers into the trend to get more liquidity and the price usually carries on in the direction of the trend within the next 3 candles.
The rules for entry are the same as with the conservative strategy:
– Value Chart hits level 8
– Price is inside the red zone
– Price hits the Fibonacci 127 projection level
Use the same money management as with conservative strategy, but your earnings will increase faster.
And remember, You have to stick with the entry rules.
Now, the below strategy is a very aggressive one that defines the means of sane trading. This strategy represents the use of price cycles and Fibonacci sequence in fast trading. Trades are not only taken at levels 127 and 161.8, but also at breakouts. And Fibonacci levels are drawn for every cycle. This strategy also exploit the full potential of value charts.
Above you learnt what you are hunting, where to find your prey, and how to bag some prey steady and safe. Now, we will go after the BIG 5.
Look at the chart below, how many price cycles do you see?
Yes, 9 cycles. Now, change your zigzag indicator parameters to 2,1,1. How many short-term price cycles do you see now?
Yup, 41+ short-term price cycles. In reality there are many many more, but let’s not make it too difficult. Each of these cycles is a Fibonacci sequence with a high-low-retracement-projection-reverse. Look at the chart below:
Now it gets complicated and wonderful:
- The Fibonacci is drawn between points 1 and 2 (in light blue)and marked on value charts the last high and low, 1 and 2 respectively. Now we have the levels and wait for the retracement which can be a wick, or a full candle. Above the retracement area is the white box marked by 3, and the green candle underneath touches that box.
- The setup is ready when the retracement candle is followed by a red candle in the direction of the trend. Now wake up.
- The next red candle closes below the open of the green retracement candle, BUT it doesn’t touch value chart level 6 yet, nor the regression channels inner band. This is marked by the light blue rectangle. So this is our first breakout candle of this specific sequence. We enter PUT 10 seconds before the close of this candle, as the next candle WILL BE BEARISH, with 90% probability. This is marked by 3 PUT on the chart above.
- The next candle closes below our 100 Fibonacci level but DOES NOT TOUCH LEVEL 127, which means it closed below the low of our current sequence. We enter PUT 10 seconds before the close of this candle because it will be followed by a bearish candle, or 2-3 bearish candles which will reach level Fibonacci level 161.8. This trade is represented on the chart by 1 PUT.
- The last bearish candle hits Fibonacci level 161.8 and value chart level -8 and also the outline of the red zone, so we place a CALL.
Within each price cycle between 3 points there are on average 3 ITM trade setups during normal volatility trading conditions. And for this strategy it goes without saying that if you don’t ‘feel’ the trade or something about the setup doesn’t seem right, don’t take it and wait for the next one.
This strategy will produce around 100 setups per currency pair per day, so use it wisely, and be very sure to learn it by heart before you jump in full steam.
The 3 strategies explained here work for all currency pairs, commodities, stocks and indices. However, even with the conservative strategy, a trader can produce excellent results if they trade 5-6 assets, and take 2 high probability trades per asset per day.
As usual leave comment below if you have any questions. Happy Trading!
Binary Options Strategies That Work
Binary options trading is not easy if you want to make money. To be successful it requires measured risk taking and someone who is willing to learn different strategies for different market conditions. Every stock moves in different patterns from other stocks, forex trades much differently than stocks do, and commodities also have their own trading personality.
Binary options traders must always learn and evolve if they want to keep a high enough winning percentage to make hefty profits. Here are some different binary options trading strategies that we use to make money.
Successful Binary Options Trading Without A Strategy
If you don’t have a trading strategy or if you are new to binary options trading, then you could try OptionRobot, the free binary options robot.
This robot does the trading for you and it’s free. Open A Free OptionRobot Account.
Binary Options Strategies
There are hundreds of different strategies that traders use, but these are our favorites that give us the best chance to make money.
Scalping Based On Price Action
A lot of binary option contracts expire in one to ten minutes. A trade this short requires a scalping mentality. The fundamentals of the underlying security are probably not important to pay attention to here. What you want is to take advantage of short term patterns in price action. There are a few ways that you can do this well enough to make money. Here are some of the best binary option strategies to make money:
- Use a technical indicator based strategy.
- Use a signal service.
- Read the tape of a stock by looking at prints.
- Jump on momentum.
- Trade the news and take advantage of trader sentiment.
- Take advantage of a flat market by buying “in the money” options.
Use a Technical Indicator Based Strategy
There are many technical indicators to choose from. Examples of popular scalping indicators that we like to use for binary options include:
- Relative strength index – Also called RSI, this is a measure of how strong or weak a stock is taking into account it’s momentum, and its recent momentum relative to its previous strength or weakness. The math behind this is complex, but what it is meant to do is to look for overbought or oversold conditions, and identify that a reversal is likely to take place in the direction of the price movement. Most people use a 14 period time frame (but you can customize this depending upon you preferences), and a high and low threshold of 70 and 30 respectively. You look for a signal when the relative strength or weakness crosses past your thresh hold. Many people will take their position when the relative strength crosses past the set threshold, and then crosses back past it again toward the midpoint. For instance your indicator may drop to 25 (below your threshold of 30), and they will take a position when it fails to stay below 30 and crosses back and hits 31. There are many different strategies involving RSI, and it comes down to the trader preference. A lot of charting software will simply give an indicator automatically so the trader does not need to actually think about the level. RSI is useful for binary options because it can quickly identify points where a short term reversal in price action is likely to occur.
- MACD – This stands for moving average convergence divergence. Unlike RSI which is meant to spot a likely reversal of direction, MACD is meant to confirm that a price trend is likely to continue. While this is used more for swing trading than scalping, MACD is still useful for shorter time periods such as 30 minute or 1 hour binary options.
- Bollinger bands – These are bands mathematically calculated by looking at the standard deviation of the moving average. They are a volatility indicator, because the more volatile the stock is, the higher the standard deviation will be of the moving average. These are useful for short term trades because when a stock hits the upper or lower band it can signal that a reversal of direction may be about to take place. In other words because stock markets move up and down constantly, we can see when a stock is statistically at a higher or lower end of its range compared to its previous moving average. The way to trade this is to buy a put option when a stock hits an upper band, and a call when it hits a lower band. Many brokerages allow traders to apply the bands to a chart.
Each indicator has its benefits and its weaknesses and limitations. Ultimately it takes some knowledge and experience to understand how to use them to your advantage so that they give profitable buy and sell signals for your trading.
Most brokerages will give you the tools to use something called “back testing”, which allows you see how well a technical indicator would have performed over some past period of time that you choose. Use the back testing feature to your advantage and you can find the indicator or mix of indicators that work for your trading style and whichever security you are trading.
You should also be aware that certain types of market environments favor different indicators. A very choppy market probably favors a relative strength or bollinger band approach, and a more directional market probably favors using moving average based indicators. Here are some additional strategies you should read as well.
Use a Signal Service
There are binary option specific services out there, and there are other larger services meant for all types of traders. Our very favorite is marketclub, which we use to trade with fairly often ourselves, but we also like barchart, and Traderific who have both free and paid services. Signaling services can be very good if you need some trade ideas, but blindly following every single will does not usually equate with profitability. The best results come from combining signals from multiple indicators and services.
Before you use any signalling service, make sure to do your research. Many services simply do not work. You need to ask yourself, if a trader can make money with their own signals, why would they sell their winning trades to other people? Sometimes the answer is to spread risk or diversify revenue streams, but many times it is because their methods don’t work. Whatever service you choose, test your strategy with them many times before putting your money on the line.
Use a Tape Reading Strategy But Trade Binary Options
This involves using a stock trading software such as “Think or Swim” to watch the prints of a stock and trade based upon the buy/sell flow. If you spot a lot of activity in one direction, or you see unusually large transactions or orders on the book, you may get an understanding of which direction the stock is likely to head in the near future. Professional traders have long used the order flow of a stock to predict which direction it is heading in the short term.
The only problem is that binary options brokerages do not display this information like some of the professional equity trading platforms do. The key for traders will be to have two platforms open at the same time, placing trades in the binary option account but using information from the equity account. This strategy will not apply to commodities or foreign exchange trades but it can work well with equity trades.
Jump on short term momentum
A trader can see when a stock is picking up unusual momentum compared to how it usually trades. Momentum is characterized by large quick moves, and moves that are much more prolonged than is normal. Even if a trader does not predict the beginning of a momentum move, they can still make money. The goal is not to predict momentum before it starts, it is to jump in and ride the wave until it shows signs of slowing.
Binary option trades are uniquely suited to taking advantage of momentum trades because they are so short term, and a trader only needs to be in the money by a tiny amount in order to have the option pay out. Even if a trader gets in later in the momentum based move, as long as they are in the money when the option expires they will get paid. This could be a 30 second or 1 minute trade that is highly predictable and pays 60%-80% on the binary option contract.
A binary options trader can easily make money using a momentum based strategy. Look for fast movement and jump in the direction of the move. This is a simple strategy, but it may take some time for a trader to hone their skills and understand what big momentum looks like so that they avoid moves that don’t follow through in the direction that they want a stock to go.
Trading the news can be a very tricky strategy, and it is not something that we would recommend to binary option beginners. News traders usually need to be in extremely quickly after news is released, because computers that can read news releases and act on the information before a human can read the first word are competing against people. A trader using a news based strategy needs to quickly read the release, asses what it materially means to the price of the stock, and judge how the stock is priced relative to where it should be given the new information. Traders who use news based strategies are often MBA types, or quantitative type people.
Even though news trading is complex, a binary options trader may be able to take advantage of the public reaction to news by capturing a small portion of the greater move. Remember binary option trading only requires you to be correct in your trade by one penny.
Remember when you are trading any news release that the direction that it will push the stock is not always apparent to an untrained person. You must balance what is released against what was expected by the market. Sometimes even if news is negative, but not as negative as the market expected, you will see the negative news make a security increase in value. Remember to always compare news against expectations before take a position. Expectations are not always readily apparent, and you should definitely test news based strategies in a demo account before you use real money. You will either get the hang of trading news, or decide that it is too hard to predict how news will affect the price.
Trade Correlated Pairs or Negatively Correlated Pairs
One strategy that many quantitative traders are taking advantage of is called correlated trading. This is largely done by computers, so you need to be fast, but a human can still make money if they are ready.
The way to make money is to find a pair of stocks, currencies, commodities, or some mixture of the two that either trade in tandem, or reliably move in the opposite direction of each other (negative correlation). An example of this type of trade would be Citigroup and Bank of America. On most days, when you compare the charts of these two stocks they will look very similar.
Here is a one day chart of C and BAC compared to each other. Notice any similarities?
Let’s say that while watching the two charts, you noticed that all of a sudden Citigroup’s price moved up $.20 in one minute. Bank of America has not yet really moved. You quickly should take a long position (call option) in Bank of America, and often times after a very small delay it’s price will follow suite and go up. Usually you only have a few seconds to act before its too late, so be quick!
Of course this doesn’t work every time, and many times they move so closely together that you don’t even have time to take a position. Sometimes you will notice a lag, and these times with a slight lag you can make a lot of money with this strategy.
Trading Flat Markets by Buying Binary Options in the Money
This is a relatively new type of trade for binary options traders because brokerages are just now allowing clients to purchase binary option trades that are already “in the money”. These will trade at a discount proportional to how far in the money the price currently is.
If you have a read on the market that says that it will be flat for a while, you probably want to take advantage of this strategy. As long as the price remains in the money, the trader will receive the payout displayed when she purchased the option.
A good time to employ this strategy is during mid day trading hours (about 12 PM- 2PM EST) because the market usually does not move very much during this time. Another good time is on Friday’s after the morning is over, and Friday’s before a holiday weekend while volume is light.
Time of year may also matter, for instance trading is usually slower during the summer months than it is during the spring.
Long Term Binary Options Strategy- Trading Fundamentals
Another type of binary options strategy which is much less common is a long term trade. Brokerages will offer options, especially foreign exchange options, which may be a month or longer in term. Traders who think that a stock is fundamentally undervalued or overvalued may take a position here, assuming that they price will tend to move in the direction of the fundamentals over the longer period of time.
A fundamental analysis involves looking at what the price of a security should be given its underlying economics and the expected future growth. Some people may use a price to earnings analysis, or a Tobins Q, or they may look at a trade imbalance between two countries whose currency they want to wager on. There are many different types of fundamental analysis, but if you think that a security should be priced differently than it currently is, you may want to take a longer term trade with the thesis that the fundamentals will push the price towards the correct value.
Be mindful that once you enter into a binary options trade, you usually can not exit it. If market conditions change you will have to stick with your trade in most cases.
The Best Binary Options Strategy
There is not one “best” strategy. The best strategy is the one that makes you money. Different trades have different preferences, comfort zones, appetites for risk, and time horizons. Test different strategies in your demo account, and use the one that gives you the highest likely hood of making the most money. While this sounds obvious, it only works if you actually do it! Get started testing strategies today.
Стратегии в бинарных опционах
Для получения прибыли бинарными опционами на регулярной основе необходимо придерживаться определённых стратегий для торговли опционами. Одни стратегии достаточно простые для новичков, другие же больше подходят для опытных трейдеров. Появление торговых стратегий обусловлено многократным анализом поведенческих моделей рынка, а также основных особенностей бинарных опционов. Благодаря правильному подходу значительно снижаются степени рисков и многократно увеличиваются шансы инвесторов на привлечение прибыли. Вот краткий список популярных стратегий, которые чаще всего применяются на нашей платформе:
Стратегия хеджирования, которую назвали Коллар, прекрасно подходит для торговли бинарными опционами. Она также иногда называется усредняющей стратегией для убытков и прибыли. Эта стратегия применяется при торговле бинарными опционами типа one touch или одно касание. Стратегия хеджирования значительно снижает риски, которые возможны при покупке одновременно опционов High/Low. Суть данной стратегии заключается в факте, при торговле появляется возможность покрывать премиальные на один опцион в результате продажи другого опциона. Существует возможность обнулить закрытие сделок, что дает возможность не получить убытки при неправильном выборе опциона. То есть, трейдер в результате не получает ни прибыли, ни убытков. Такой результат называется бесплатным Колларом.
При торговле бинарными опционами часто используется стратегия Стрэнгл. Название звучит в переводе с английского языка, как давить, душить. Благодаря данной стратегии трейдер может получить возможность использовать одновременно опционы одному активу. При определенном развитии событий одновременное приобретение этих опционов с разными страйками может принести ощутимую прибыль.
Если приобретение опционов при стратегии стрэнгл выполняется по различным ценам исполнения, то стратегия стрэддл предусматривает приобретение опционов по одинаковой цене исполнения. Отличаются стратегии стрэнгл и стрэддл ценой. Так цена одного стрэддла равняется цене нескольких стрэнглов. Естественно, использование стрэнгла обойдется в несколько раз дешевле использования стрэддла. Конечно, прибыль также будет более ощутимой от использования стрэддла, ведь доход от продажи стрэнгла расположен в более суженном коридоре.
Реверсивные, или разворотные стратегии несут в себе несколько более прибыльный характер и основаны на отклонениях базовых активов от своих нормальных показателей и последующий возврат к нормальным показателям. Трейдеры же в свою очередь покупают «high» или «low» опционы, предугадывая их возврат к нормальному положению. Данный метод требует некоторой подготовки и знаний нормальных показателей активов.
Еще одна популярная среди начинающих пользователей стратегия – это по «Мартингейлу». Она являет собой удвоение покупок опционов после неудачной сделки. С каждым следующим удвоением ставки шанс на прибыльный опцион увеличивается в два раза.
Where the breakout strategy required you to identify levels of support and resistance and then wait for a breakout point, the support/resistance strategy will require you to identify them and then utilize pattern within the levels. How can you do that? Read on and find out..
Что такое стратегия поддержки/сопротивления?
The support/resistance is a short-term strategy that helps you utilize the levels of support and resistance to your advantage. How is this possible? It’s pretty simple, really. Once the price tests the support/resistance, it tends to go in the opposite direction. This is where you enter the trade – right after the price has tested the levels. Of course, this doesn’t guarantee anything, but it leaves you with a nice chance of winning.
60-second binaries are fast-paced trades so you need to be quick about it and not let yourself fall in a pattern of just waiting and looking at the charts because you might miss the moment and enter the trade in a wrong time, when the price is ready to reverse directions again. You need to be really quick in order to utilize this strategy in order to improve your chances of winning. Speed isn’t everything, though. It’s also important to study the charts and establish previous patterns before you decide to enter a trade. The more information you have, the more likely you are to be successful.
Что нужно знать для того, чтобы стратегия работала?
The required skill set here is pretty much the same as the one required by the breakout strategy. You need to know at least basic technical analysis. You will have to read charts, so you need to be familiar with the type of chart your broker is using. The most popular today are the candlestick and bar charts and they are the ones you should utilize because they show you lots of information and make it easy to establish a support and resistance level. Of course, you also need to know what support and resistance are and how to establish them.
When the price can’t go below a certain level, we call that a support level. In order to establish support, the price has to consistently be unable to breach that level. In the case of support, it’s the same, but the price can’t above a certain value. Once more, this phenomenon has to be observed several times in order to establish it.
The best thing about this strategy is that it gives you a great chance of success if you’re quick enough. Usually when the price tests the level of support/resistance (which means reaching it without breaking it), it goes in the opposite direction, which is when you should enter the trade. You need to be quick, though. Enter too early and you may hit it right when it tests the level, which means that it will be at its highest/lowest and you will lose (unless you’ve made the right call, which is not likely if you screwed up your timing). Enter too late and you may hit the reversal when the price had changed direction, gone up or down, and now is reversing it again.
It’s important to note that levels of support/resistance are established when there are relatively small price movements. The price will move between the support/resistance levels and these movements can be quite fast, albeit insignificant in the long scheme (because there is little trading of the underlying asset, the price is stable in the long run which means that these fluctuations aren’t relevant for long-term investors).
What this means is that you need to be precise and make quick decisions, as well as enter trades at the right time. The safest time to enter is right after the support/resistance has been tested. This is when the price is sure to be in the opposite direction at least for a little while. If its tested the support, then place a call trade because it’s likely to go up. If it’s tested the resistance, place a put because it’s likely to go down.
In order to minimize the risks, you shouldn’t trade more than 5% of your capital. All in all, there is no such thing as a “sure strategy” so you need to always be prepared for the possibility that you will lose.
Binary options trading is all about predictions. If you can make accurate enough predictions based on the information you’re presented with, then you can make a nice profit without too much of an effort.
However, predicting the price movements isn’t easy, especially on the one-minute scale you will be working with (after all, they’re called 60-second binaries for a reason) which means that you need to have a viable strategy to implement in order to improve your chances of profiting.
Never take unnecessary risks. Even though it’s true that 60-second binaries require you to be quick in your decisions, that doesn’t mean that you’re supposed to commit to bad trades. Your strategy will determine what is a good and what is a bad trade. We’ve already covered the importance of strategies and the skills you will need in order to become a good trader in another section. In this one, we will talk about the breakout strategy.
What is a breakout strategy?
In the periods of stagnation on the market, prices begin to consolidate on certain positions. These positions tend to form levels of support and resistance. When the price can’ fall below a certain level, then we call that level support. In quite the same manner, when the price can’t go above certain levels, we call that level resistance. The levels of support and resistance are pretty obvious in charts.
When the price of an asset touches the level of support or resistance but doesn’t break them, we say that the price is testing them. When the price manages to break levels of support or resistance, then we are talking about a breakout. The breakout generally needs to be confirmed in the long run because sometimes there are “fake-outs” but in general a breakout in either direction signals the forming of a new trend.
Traders who use the breakout strategy wait for a breakout to occur and enter a position early in the new trend. Once the new trend is formed, the former level of support or resistance (depending on where the price broke out) becomes the opposite of what it used to be (which we call a reversal). For example, if the price broke the resistance levels in an upward direction, then the previous resistance level becomes the support level for the new trend. If the price broke downwards, then the previous support level becomes the resistance level for the new trend.
In order to use this strategy, the trader has to carefully follow the charts and price fluctuations in order to spot the breakout. Once he see the support or resistance being broken, he is ready to enter a position. The problem with this strategy in the 60-second binaries’ real m is that it cannot be confirmed right away. Usually the confirmation that we have a breakout in normal trading comes from the price closing higher than the level of resistance or lower than the level of support. Nonetheless, the strategy can be used because we don’t really need to confirm it in the long run.
We need it to be there for the next minute. Once the price breaks in either direction, it will immediately try to return to the level before it was broken but will probably be rejected. We still need to wait for a bit to see how persevering the price is. If it doesn’t get back to the previous levels in two attempts, this is where it’s a good idea to enter the trade. If the price broke upwards, then you place a call bet and if it went downwards, you place a put bet. The fact that it didn’t get back to previous levels indicates that breakout is persistent enough. Keep in mind, though, that there is still a chance that the price returns to the original boundaries in the third attempt. This is the risk of the strategy because of its short-term nature.
A few tips
Many brokers today give you the opportunity to observe past trends in order to make up your mind of how you want to invest. There are also tons of independent tools, apps and sites online. All you have to do is find them. It would be a good idea to learn how to read candlestick chats because they’re widely used.
Money management is important. You should risk more than 5% of your capital on a single trade. Follow this rule and you will significantly cut your losses. Also, before you actually start trading your own money, try out every new strategy using the demo. This way you won’t risk your own money and in the same time you will find out how well you know the strategy, in reality.
If you want to make some money by trading 60-second binaries, then you need to employ a strategy, read charts and look for indicators before you even begin to trade. If you don’t do that, then you are basically gambling your money (and you might even have a smaller chance of winning than some gamblers considering the fact that even gamblers use strategies in games like Blackjack, Craps and Baccarat).
Strategies are in the heart of the money process of trading binaries. If you’re not familiar with charts and technical analysis, visit the “Technical Analysis” sections of our site. We have a very comprehensive guide to technical analysis, including charts, types of charts, patterns, indicators and more.
Unlike most other types of trading, though 60-second binaries require you to be extremely quick and make decisions on the stop. Often times you will have mere seconds to take action and you can’t afford to lose even a single moment. But having a good strategy, although it’s a good start, is not enough to make you a successful trader. You also need to be disciplined (what’s the point in having a good strategy if you don’t follow it) and you need to know when it’s time to back down and stop trading.
Many investors make the same mistake when they lose from a trade – they try to immediately get their money back and thus lose a lot more because their emotions are clouding their judgment. This is always bad because often time you tend to see what’s not there and lose a lot more, which increases your anxiety and the need to make a fast profit, which leads you to even more bad trades. The way to avoid this is to simply stick with your strategy.
Basic knowledge you will need in order to form or follow a strategy
Many traders refer to 60-second binaries as gambling. They would be right if a good trader wasn’t working with so much information, processing data and making good money out of his trades. 60-second binaries are only gambling if you gamble your money away counting on luck. If you’re methodical, know the market and and are good at technical analysis, then you will never have to gamble in any way, shape or form. Of course, there is no such thing as a 100% good strategy. There is no magical formula that will give you 100% success rate from your trades and make you millionaire in a few hours. However, there are strategies that increase your chances of winning, especially if you can find the right indicators.
In order to trade well, you need to know the market. You also need to have the ability to spot trends in their genesis and see indicators when they are there. You won’t have any time to lose so you need to be able to do all of this in your sleep. You will have to work with lots of charts, so learn how to read them. We have very comprehensive guides on our site so go look them up if all of this seems like a collection of random words to you. If someone told you trading binaries was going to be a walk in the park, then someone lied. You will have to work for it.
Develop Analytic Skills
You will have to be analytical and have a great attention to detail and you have to learn to accept failure, because no matter how good you are, some of your decisions will lead to losses. You need to have a responsible money management so that you can ensure that the losses don’t mitigate the profits. Trading binaries is a demanding job. Yes, it gives you lots of freedom, but it requires lots of work, as well.
There is one more thing you need to keep in mind. No matter how good a strategy you have, you need to learn to adapt. The fact that a strategy is good in a certain market doesn’t mean that it will be good in every market. You need to analyze, adapt and trade carefully. This is the only way to become a successful trader in the highly competitive world of 60-second binaries.
How can you trade 60-second binary options? It’s actually much easier than you might think. Making a profit is the tricky part (we’ll touch upon that subject in the “Trading Strategies” section) but trading, in itself is pretty simple. You will only have to find the capital to start and find a broker that offers 60-second binary options trading. That’s it, really. That’s how you trade 60-second binaries. However, how do you trade 60-second binaries correctly? This is a much better question, and one we will attempt to answer.
How do you trade 60-second binaries properly?
To many more or less inexperienced traders, 60-second binaries may seem more like a gamble than anything else. However, if you have a bit of an experience in the field, you know how to read charts and spot trends, then you will definitely know that it’s not as much of a gamble as it is a calculated risk. The thing about 60-second binaries is that they are traded really quickly, so you need to be able to quickly think on your feet. You need to be able to make quick decisions and you will also need to have quick fingers in order to place the trades fast.
Since 60-second binaries trade so quickly, you need to have clear strategy if you hope to make a profit. You also need to be really disciplined with your trades. Don’t let the small investments you make fool you – you can lose a lot of money in a few hours if you’re not careful. The correct way to trade is to not try to rush things. Yes, 60-second binaries require speed. However, if you rush to enter every trade, even if that trade doesn’t bear the potential to be beneficial for you, then you will suffer significant losses even if you make small investments.
The proper way to enter a trade is when you know you have a high chance of the trade being successful. If there have been two up-movements in the last two minutes, then it’s not that far fetched that an uptrend is forming, and if you place a call trade, you might win. Same goes for two down-movements. But in order to know that, you need to use the proper software.
There are many free applications and sites that offer you all the data you will need to make a decision, but you need to utilize the opportunities. Of course, you can trade like some people do it – just go in the site and start betting your money, like gambling. However, you will lose more than you win this way, which isn’t really the idea, is it? The proper way to trade binaries is not to turn it into a game. It’s to remember that this is a source of income and a job, and you should treat it like that. You can’t afford to start throwing money at the broker in the hopes that you might get something right. You need to have a strategy and you need to follow the data. This is how you trade properly.
Some advice when it comes to binary options
Many claim that they’ve discovered the “holy grail” of binary options trading – that one strategy that gives you 95% success rate and will make you rich in the matter of hours. Of course, you will have to pay in order to get it, but what are a few hundred dollars compared to the thousands you will make in the next few hours, and hundreds of thousands you will get in the next few days? Nothing, right? Wrong! When something seems too good to be true, it probably is.
Don’t believe such bogus strategies and methods – there is no magic formula that will ensure that you win 95% of the time. There is no magic formula that will make you rich. Sure, you can make money from binary options, but the truth is that it will require a lot of time, effort and attention. You will suffer losses along the way, you will be on the verge of giving up, and you will meet ups and downs. The point is that you should always be careful when someone offers you “the best strategy”.
Also, choosing your dealer carefully matters a lot. Some dealers offer bigger payouts than others. Some offer better customer support and some offer you all in one. Choose your broker carefully – this can be the difference between making a lot of money and being frustrated with constant losses and software problems. If you want to trade properly, you have to work for it. There is no other way. The good news, though, is that it’s absolutely worth it.
In this article we discuss the aggressive style of binary options trading. How aggressive are you? In the end, after all we’ve talked about, it all boils down to this – how aggressive are you? And more importantly – how aggressive when it comes to trading binary options can you afford to be? In every movie about Wall Street or any type of trading in general, the character people most look up to is the cocky, confident (sometimes even arrogant) trader who always knows what he’s doing and isn’t afraid to take big risks because the high rewards they bring. In reality, though, things are a bit different. Being that aggressive trader if you don’t have the capital and the nerves of steel to back up that style of trading can ruin you.
It can not only bring about your financial ruin, but it can also take a toll on your health and even deal irreparable emotional damage. It may sound far-fetched, but is it really? Think about every small loss you’ve had to endure and now multiply that feeling by a thousand. Just imagine that you’ve just lost your entire capital on a single deal. How do you feel? Doesn’t seem so far-fetched now, does it?
Still, aggressive trading is sometimes acceptable, but only when certain conditions are met. First, in order to trade aggressively, you have to be cut out for it. Emotions can’t play any role in your trading. You need to be able to handle eventual losses well. You will need nerves of steel because the risk is high. Not everyone can handle considerable losses so you should ask yourself how would you react if you lost most of, if not your entire capital.
Can you handle it? If you can’t, then better stick to safer trading styles. Also, this type of trading is usually suited for younger traders. It’s much easier to bounce back, take risks and basically be reckless with your money if you don’t have a family to feed. Having an additional source of income is a huge plus. If you don’t have additional income, then you must make sure that your portfolio is diverse enough to handle the losses.
This is just the beginning. Aggressive binary trading requires much more management, so you need to make sure that you have the time for it, and that you’re ready to dedicate yourself to the trades. You will have to constantly follow the market and make adjustments to your strategy in order to stay in the game. It’s undeniably much more stimulating than safer trading styles. You will have to constantly keep your head in the game and absorb all that information in order to make the right decisions – it’s thrilling. However, as we said, it’s not for everybody.
We feel we’ve issued enough warnings. If you can’t handle the pressure, don’t go trade aggressively. Now let’s take a look at the good side of aggressive trading. Sure, it’s much riskier and requires a lot more work, but it’s much more beneficial if you manage to do everything correctly and the market is on your side.
The thing with high-risk, high-reward styles is that the rewards are high if the conditions are right and Lady Luck smiles upon you. The truth is that no one can say for certain what’s going to happen, so strictly speaking you may end up being safer by employing an aggressive strategy, simply because your profits will make up for your losses, and then some.
However, the problem is that if the environment is against you, then you will be left with significant losses and no way to compensate. It’s a thrilling game. There are some trades that are enough to get your blood pumping as much as bungee jumping. If you’re a thrill-seeker, then this type of trading is just for you. However, there is one important thing to remember – never be irresponsible with your money. You can’t afford to lose everything.
The difference between a good trader and a bad (well, one of the many differences) is that the good options trader always has a safety net whereas the bad trader goes “all in” counting on a bit of luck and nothing more. And when his luck runs out, then he is simply no longer a trader because he doesn’t have anything left to trade with. It’s a gruesome truth, but one you need to accept if you don’t want to end up like this. Always have a contingency!
We’ve already established the differences between fundamental and technical analysis in the previous section. Now it’s time to talk in more detail about technical analysis and one of its defining characteristics – the search and identification of trends.
Trends are one of the most crucial analytical units in technical analysis. Spotting them is one of the main objectives of the process, hence their huge importance is simply undeniable. Even so, the idea is not all that difficult to explain. Trends in finances are not all that different from trends in the general sense of the word. What it really means is the overall direction where something (in this case the market) is headed. You can clearly see the trend in the following example:
However, keep in mind that it’s not always as easy to spot a trend as you might be led to believe. That’s why a proper skill set and lots of training is needed before you will be competent enough to identify a trend in normal circumstances. Here’s another example of a trend in a more natural environment. As you can see, you can’t tell it right away.
Some charts offer you lots of information about the security, but hardly where it’s headed. Additional training and research are needed before one is able to spot trends by simply looking at a chart. Sometimes, additional information about the market environment as well as the characteristics of the asset are also need if you hope to identify a trend.
A More Formal Definition
You already know that spotting a trend isn’t as easy as it may look at the first glance. By looking at a chart, you will notice that the numerical values of the price of an asset never go in only one direction and always have some sort of fluctuations. This means that we can’t identify a trend on the sheer price movements in a direction; instead, we look the series of highs and lows the prices go through during their movement and this is how we determine a trend in the financial sense of the word.
give you an example, an uptrend would represent higher highs and higher lows in a series of numerical progressions and will tell us that there is an overall rise in the price of the asset. If it keeps the same direction, then we have a trend. The situation with the downtrend is the polar opposite – we get lower highs
As you can see in the example, we have a progressive series of highs and lows and it’s clear that the overall price of the asset is going up. The trend keeps up as long as each low is higher than the one before. If the successive low is lower than the one that preceded it, then we are talking about trend reversal.
Types of Trends
The types of trends we know are three. You already know about uptrend and downtrend. In the uptrend, each successive low is higher than the one before it, which means we are talking about an overall upward direction of movement, hence the name. In the downtrend, each successive high is lower than the one before it, which means that the overall direction is downward. There is a third type of trend we haven’t talked about yet, and that is the sideways trend (also known as horizontal trend). There has been some dispute as to the validity and existence of such trends at all.
While some traders consider them an important part of the decision making process, others think that there should be no existing definition for those trends because they are more technically a lack of trend. Unlike the uptrend and downtrend, the horizontal trend offers little to no movement (which is why some traders don’t consider it a trend). It’s a moment of stability. Whether you think it’s a trend or the lack of thereof, it’s important to acknowledge when the market reaches an episode of stagnation.
The Importance of Trends
Identifying and using trends to a trader’s advantage is one of the most important aspects of trading. Even though it may sometimes be complicated, the process of spotting and properly trading based on a trend is in the heart of the successful business transaction. Technical analysis relies heavily on the analyst’s ability to perform those duties well and even though it may not seem like it sometimes, if you manage to identify a trend and use it, you can make a lot of money (even though there are still risks).
Here you can learn how to use how to use fundamental and technical analysis in order to trade binary options. There are two main types of analysis concerning the financial markets – fundamental analysis and technical analysis.We’ve touched on the subject of the difference between the two – technical analysis goes after empirical data and studies price fluctuations in an attempt to spot trends and predict future movements, whereas fundamental analysis observes economic factors and tries to determine value based on those factors. However, let’s look at more details and compare the two schools of thought more thoroughly.
Charts vs. Financial Statement
At the lowest level, the difference between the two types of analysts is that a fundamental analyst would start with a financial statement, whereas a technical analyst would always go for the charts. The fundamental analyst endeavors to compute an approximate value for a company based on different sources of information, such as cash flow statements, balance sheets, financial statements and more. By determining the intrinsic value of the company using this approach, it’s fairly easy to make financial decisions. If the stocks are sold at a price lower than the intrinsic value, then it’s a good investment and if the stocks are sold at a higher price – it’s a bad investment.
(Note that this is an oversimplification for educational purposes only. In reality, the methods involved in determining values and basing your entire investment strategy on those findings is way more complicated. You can spend days reading about it and barely scratch the surface.)
As far as technical analysts are concerned, though, most of the actions related to calculating the intrinsic value of the company are a waste of time. As far as they are concerned, the only thing that matters is the stock price. They are only interested in empirical data and consider that all the information they would need about the stocks can be found in the charts. Technical analysts don’t concern themselves with value – for them, money talks. By looking a chart, they expect that the past price movements can indicate different trends and can predict future price movements.
Another big difference between the two types of analysis is the time frame. Where fundamental can involve the processing of data over a number of years, whereas technical analysis can work with information in the range of a few minutes. This obviously means that fundamental analysis has a long-term nature, whereas technical analysis can be used in the short-term.
There are a few reasons for this difference. The most significant one is that fundamental analysis focuses on the long-term because of the investment style it complies with. The trades and investments based on the intrinsic values of a company are not reflected on the market immediately. This means that even if there are some changes, they aren’t as fast and dynamic as price fluctuations, for example. Hence, fundamental analysis isn’t bound by those short-term changes. This sort of investing is called “value investing”. It’s a long-term investment method entirely based on the premise that short-term investing is wrong.
There is another factor making it impossible for fundamental analysis to be conducted in a short-term window. The information and different statements fundamental analysis works with isn’t released frequently at all. For example, financial statements are released quarterly. Now, compare that the price differences of the stocks that can be observed all the time and you can easily see why the difference in time frame is there. Where technical analysts can work with stock data generated all the time, fundamental analysts work with information released at much bigger intervals.
Trading vs. Investing
Another big difference between the two types of analysis is the objective. Technical analysis is based on short-term empirical data and is mainly utilized in trading. Fundamental analysis aims at assisting in the investment department at a much grander, long-term scale. The aim of a trader is to purchase an asset in order to later re-sell it a greater price, thus making a profit from the difference. This is short-term process. On the other hand, an investor looks for assets he believes will rise in value as time progresses, and makes the purchases based on that premise, fully aware that this process may take a long time and has long-term consequences. It may sometimes be difficult to understand what the difference between trade and investment is (the line between the two is rather thin) but this is one of the main aspects differentiating between fundamental and technical analysis.
Now that you have a better understanding of the difference between these two types of analysis, in subsequent sections we will focus more on the introduction of technical analysis.
Price is an essential point in trading, which is why we’ve mainly focused on its mechanics up until this point. However, trading binary options has other important aspects and volume is one of them.
What is Volume?
The concept of volume is a rather simple one. Volume is the amount of shares or contracts traded within a set time perimeter (a day, in most cases). The higher the amount, the higher the volume, and hence of activity of the security. Changes in volume can easily determined or viewed as in most there are volume bars located around the chart. By observing shifts in a security’s volume, we can spot emerging trends, just like we can use prices for the same purpose.
How Important is Volume?
It is possible to use volume as a confirmation mechanism for trends and chart patterns, automatically making it one of the most important aspects of technical analysis. If we observe a price alteration with a high volume level, it would be considered more relevant than the same price alteration but with low volume. In the first case it’s much more probable that we are talking about a trend reversal, while in the second case it might be a simple temporary fluctuation which is irrelevant to long-term trading.
Let’s set an example in order to visualize this more easily. Imagine that a company’s stocks rise in value with 5% in one trading day after a long-term drop. We have the price aspect, but it cannot tell us if we’re looking a trend reversal or a random fluctuation at the given time. For a more relevant conclusion, we should look at the volume of the asset for the same day. If the volume is higher than average, then this might very well mean that we are looking at a trend reversal (remember that technical analysis isn’t an exact science, which means that this is not conclusive; it’s telling us what we might be looking at but we are still working with possibilities). However, if the volume is lower, then it’s probably not a trend reversal at all.
Volume should generally go the same direction as the trend. If prices are rising, then so should the volume, and vice versa. Volume can also be used to determine a trend’s stability. In the cases where the two values correspond and have the same direction, then we are talking about a stable trend. However, if the price and volume start moving in different direction, this may be a sign that we are talking about a weakening in the trend.
In the cases when price and volume tell different stories, we are talking about a divergence. This is a phenomenon described as a discrepancy between two different indices (in this case price and volume).
Volume and Chart Patterns
Volume can also be used to confirm chart patterns. We will describe the confirmation process in more detail once we talk about the different patterns, such as head and shoulders, triangles and flags. Volume is the aspect that helps us determine the accuracy and strength of a pattern.
Volume can also give us a basic idea about the future price movements of an asset. If the volume is decreasing, then the price will probably decrease, as well, even if there is an uptrend at the current moment. This is a very important point for various reasons, the most important one being that it can actually help us with price predictions and can give us the idea of when it’s the right time to buy and the right time to sell.
This is an overall important aspect of technical analysis and will help us in our further studies of the this splendid activity called trading. The better your understanding of the basic concepts is, the better you will be able to grasp the overall concept, the ideas that tie the whole venture together, the immense opportunities related to trading. In the end, all of this is crucial for your understanding of the market and the modern economic mechanics. Now that we’ve covered some of the basics, it’s time to move on to something a bit more complicated – charts.
Here you will learn the basics of money management and position sizing in binary options trading. Managing one’s money money is an important step towards developing a steady and long lasting flow of capital; especially when the transactions happen so loose and fast and it is quite possible to make a financial mistake while your at it.
Position sizing refers to dealing with your how much of your total account you risk with each individual binary trade. If you are not careful and spend too much money (and the market statistics go very differently from what you had predicted), there is a big possibility of a partial, if not complete bankruptcy for the trader.
But like the saying goes “You have to spend money to make money”. And this cannot be more true for binary trading, for if one doesn’t take the initiative and risk some capital, how can he then expect a big return? In the case of Forex trading, market shares etc. it is very difficult to keep an exact lock on your purse, seeing as the exact value of your stock is not predetermined as it is with trading binary options.Before we can begin trading, we must inset some funds into our account. Some brokers would allow a deposit as low as €100 euro, although from a purely practical reason, we suggest investing no less than €500, if just to make any potential profits seem more noticeable. Should one go a head and decided to deposit additional funds one they get acquainted with the mechanics behind these sorts of transaction, this is perfectly acceptable and even recommended for traders who are just stepping foot into the world of trading.
A very good idea is to split your funds between multiple brokers (2-3 at the same time). There is a good reason behind this, most important of which is that a broker can go out of business at any given moment; making the idea of investing all your capital in one place seem like an unnecessarily risky gamble.
Another reason is that different brokers each have their own set of rules, payouts, underlying asset options etc. And although some traits can be beneficial for the investor, others however might prove to be a weakness. So knowing all about the conditions by which your money is traded is very important for a successful chain of predictions should you choose to implement strategy.
So regarding proper position sizing, we would strongly recommend to divide the total of your capital into convenient portions (percentages), and invest each one to a corresponding binary option. For the purposes of explaining this concept, we will invest €500 between two unrelated/competing brokers.
If we decide to buy 5 binary options from each broker at a rate of 10% of the total per purchase, that would make a €50 dollar investment a piece. Beginners are not advised to go above the 10% mark, unless they wish to risk the majority of their capital. Only after a trader has gotten the feel for trading with binary options, should he increase the percentage or better yet, just add more funds. Of course everything must be calibrated and tuned to the utmost precision; like the optimum risk amount, risk of ruin and computing the Kelly Value.
A Few Steps to Profitable Trading
Step #1. Never rely on any super natural premonitions, including hunches, lucky clovers, coin tosses, mediums, fortune tellers, lucky guesses, talking guts, a sign in the clouds or anything else that doesn’t have any basis in reality. Find a strategy that would suit your particular taste and go with it until you figure out something better.
Step #2. Determine what kind of bet you are interested in (and hoping would turn out to be the most accurately predictable). As we recall, those can include the simple Call/Put method, or one of the four ‘touches’, as well as the time span they are traded in.
Step #3. Like with many things in life, choosing the initial conditions will determine the layout on which the play is developed. In this situation, choosing a competent and ‘seemingly stable’ set of brokers is the key to a secure investment.
Step #4. Never allow yourself to step over the boundary of what is considered a reasonable expense at the particular station. Getting carried away with your funds due to poor money management is probably the biggest mistake most beginner binary option traders make (and they reason they fail, obviously). Keep a close eye at all your expenses, be mindful and write everything down as you go along. You will need to draw some sort of statistic from your transactions later on.
The FTSE, getting its name from noticeable British companies totaling 100, are all situated inside the London Stock Exchange. Inside the marketplace there is a broad scope of enterprises that makes up this index. Both the London Times and the Financial Times have come to hold the FTSE together. The essential features that determine the cost of the index have the binary options strategy structured on its capacity.
Earning Reports for United Kingdom
The United Kingdom’s specific trading companion is the Euro Zone. Anything that occurs throughout this sector can easily influence indicators among the UK, regardless of the fact they refused to be a part of the Euro Zone. The FTSE is certainly included here and this association between them can aim the binary options investors in the position of various essentially lucrative possibilities. For the duration of your trading occupation continue to be attentive to this secure relationship.
Examine the FTSE 100 Index
You will need to provide yourself with critical and specialized evaluation in order to exchange or trade for earnings in the FTSE 100. Several practical tools are provided to binary options traders such as market news, charts, graphs and even more. You will find out that most of the brokers can offer you simple tools to use but there are even more you can find online. For example, there may be planning packages that can be modified according to your specific functions on binary options trading. You may have to sign up for a free account to get some of these, but they are free!
How to Trade with FTSE 100
When it comes to trading, it should not be difficult for binary options traders to detect any pertinent information. Brokers will be able to show you present values and historic prices and so can use sources such as Reuters and Bloomberg. The first step you should make is creating a strategy on account of the insight to where current prices have changed compared to prior times.
Put and Call trades are the easiest trading methods for binary options. The trader will know whether or not if the put and call options are a better choice to follow but everything will depend on the asset price data. Traders should be able to correctly develop and come up with highly precise forecasts unless the asset prices are too inconsistent.
A function known as trade customization is an Option Builder, which a binary options broker can supply you with. This handy component will assist you in making very distinct decisions in relation to investment amounts, expiration time, etc. One should always to pay attention to trading times to see if they correspond to London market hours. If you are the one to follow financial reports then you should make sure you synchronize your work schedule with the one of the UK business hours.
History price data, which is found in earning reports, are only published four times per year for those, who are into establishing trades upon them. You should be be watchful for purchases, mergers, and other vital key ideas associated to businesses related to your trades. The index price will pretty much go up or down based upon multiple change standards.
If you are going to trade through the FTSE 100, then you should realize that this market is not as changeable as the American or Asian ones. Bearing this fact in mind, you will be sure to notice that a less versatile market can be described with better reliability. Although there is no guarantee that you will make a profit, you should definitely make sure you have studied carefully the specific features of the market.
Это лишь несколько основных методик, по которым работают с бинарными опционами, а ведь из незатронутых еще есть много визуальных графических, по подсчетам, сезонных, а также многих других методов заработка денег опционами.
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