Binary Options Strategies – Key to Great Trading

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Strategy is a key element of long term successful binary options trading. Traders just want a strategy that works. More advanced traders can find forex strategies, scalping or arbitrage tips and mt4 strategy. Whatever you are looking to learn about strategy, you will find here. This page provides a definitive resource for binary trading strategy.

No more searching for books, pdf, videos, software downloads or ebooks! These pages list numerous strategies that work — but remember:. The art of trading binaries profitably shares some similarities with the sports betting world. The important trait that links both enterprises is that of expectancy. Long term profit trading binaries can only be derived where the expectancy the theoretical profit within any trade results in a positive expectation from that trade.

Binary options trading strategies are therefore used to identify repeatable trends and circumstances, where binary options strategy key to great trading strategies trade can be made with a positive profitable expectancy.

It may be as simple as. Strategies do not need to be hugely complex though they can besometimes the simplest strategies work best. There are a range of techniques that can be used to identify a binary options strategy. New investors may like to explore all of them — each has the ability to binary options strategy key to great trading strategies profitable when used correctly.

In addition to the type of basic, or traditional, trading strategy highlighted above, there are also alternative methods. A good binary trading strategy will simplify much of the decision making about where and when to trade. With timing the key to everything where trading is concerned, the less guess work there is around entry and exit points, the better. Particularly for less experienced traders.

A repeatable strategy will always highlight the trading opportunities, where otherwise, the majority of those openings would be missed. Strategies encourage discipline, aid money management and provide the clearest predictor for positive expectation.

While it is possible for traders to profit from binary options without a strategy, it will be exponentially harder. Novice traders will also benefit simply from trying to build their own binary options trading strategy. Once some time has been spent analysing different methods and building a strategy from scratch.

It is much easier to appraise binary options strategy key to great trading strategies offered by others. Demo accounts can be a good place to start experimenting with binary options trading strategies without risking any capital. Read our full list of demo account brokers here. There are three binary strategy elements every trader must know. In this article, we present each type strategy and examples for beginners and advanced traders. Each of these strategy does a very specific thing for you.

To be successful, you need all three. If you lack one, the other two become useless. The trading strategy is the most famous type of sub-strategy for binary options. It is so famous that many traders make the mistake of thinking that it is the only strategy they need. But more on binary options strategy key to great trading strategies later. A trading strategy helps you to find profitable investment opportunities. It defines which assets you analyze, how you analyze them, and how your create signals.

For example, a trading strategy could define that you trade only big currency pairs between 8 and 12 in the morning, that you use a 15 minute price chart, and that you invest when a 10 period moving average and the Money Flow Index MFI both indicate the same direction — for example, the moving average has to point up, and the MFI has to be in an oversold area, or vice versa.

The great advantage of such a definite strategy is that it makes your trading repeatable — you always make the same decisions in the same situations. This way of trading is crucially important to your success because binary options are a numbers game. Financial investments, in general, include the risk of losing trades, but the short time frames of binary options are especially erratic.

You can never be completely sure what will happen next. Even the best traders will win only 70 to 80 percent of their trades, those with high-payout strategies might even turn a profit with a winning percentage of 30 percent. Successful trading does not mean to be always right. It means to be right often enough to turn a profit.

Think of a coin flip. When you win 50 percent of your trades and get twice your investment on winning trades, you know that you would break even after flips.

If there were some way for you to increase your winning percentage to 60 percent, however, you knew that you would make money. The same applies if there were a way to increase your payout. Your trading strategy does exactly this for your binary options trading. This means you need to win 60 percent of your trades to make money. A trading strategy helps you to identify situations in which you know that if you always invest according to your strategy, you will win at least 60 binary options strategy key to great trading strategies of your trades and make a profit.

Without a concrete trading strategy, you would never know if you would win enough trades to make a profit. On some days, you might get lucky and make a lot of money, but on others, you would lose half of your account balance. Sooner or later, you would have a bad day and lose all of your money. With a trading strategy, you can avoid such a disaster. A trading strategy is a crucial cornerstone of long-term trading success. A money management strategy is the second cornerstone of your trading success.

Even if you have a strategy that gets the odds in your favour, for example by guaranteeing that you will win 60 percent of the flips, this strategy will lead to disaster if you always bet all your money on every flip. You might win the first one, but you will soon lose a flip, and all your money will be gone. To prevent bankruptcy, you have to limit your investments. This is the first purpose of a money management strategy. The second purpose is to help you adjust your investment according to your capabilities.

To fulfill all three of these criteria, a good money management strategy always invests a small percentage of your overall account balance, ideally 2 to 5 percent. Whether you should invest 2 percent or 5 percent on every trade depends on your risk tolerance and your strategy. Investing more can make you more money, but losing streaks will be more expensive.

We recommend using a demo account to find the right setting for you. An analysis and improvement strategy is the most overlooked sub-strategy you need. It helps you to find the weak points in your trading and improve over time. Without an analysis and improvement strategy, long-term success is at least difficult, if not impossible. When you get started in binary options, you still have a lot to learn. That means you have to try different strategies, vary the parameter of each strategy and make improvements.

This might sound simple, but it is very difficult to figure out what works for you and what does not. There are so many variables that it is almost impossible to connect all the dots.

Without an analysis and improvement strategy, newcomers lose themselves in the endless complexity of trading. An analysis and improvement strategy makes this complexity manageable. There is no precise definition of what your analysis and improvement strategy should look like, but by far the binary options strategy key to great trading strategies common approach is using a trading diary.

In a trading diary, you note every aspect of your decisions. After you invested, you write down which indicators you used, which time frame, which asset, and which expiry. You also write down your location, your mood, the time binary options strategy key to great trading strategies the day, and your trading device.

Once the trade is finished, you note the result. After a while, you can analyse your diary. You might find that you won significantly more trades in the morning in the afternoon, that you are a better trader with your phone than with your PC, or that you can interpret moving averages more effectively than binary options strategy key to great trading strategies formations.

Regardless of what you find, the result helps you to focus on the elements of your trading strategy and your money management that work for you and eliminate everything else. You will get better and better, and eventually, you will be good enough to turn a profit. Keep writing your diary anyway, and you will be able to recognise mistakes creeping in before they cost you a lot of money.

In theory, anything can be your trading diary. Some traders take screenshots, others keep an Excel file, and some write binary options strategy key to great trading strategies books. Pick the diary that works for you, and you will be fine. A binary options strategy is your guide to trading success.

While it can seem difficult to find the right strategy at first, with the right information, things are rather simple. You need a trading strategy, a money management strategy, and an analysis and improvement strategy, and you will be fine. Find support and resistance levels in the market where short-term bounces can be had.

Pivot points and Fibonacci retracement levels can be binary options strategy key to great trading strategies useful, just as they are on other timeframes while trading longer-term instruments.

Take trade set-ups on the first touch of the binary options strategy key to great trading strategies. I believe that taking a higher volume of trades can actually play to your advantage.

For those who are not familiar with this form of analysis on longer term expiries: So marking support and resistance is a vital. If it does reject the level, this helps to further validate the binary options strategy key to great trading strategies of the price level.

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Welcome to our binary options strategy section. Strategy is one of the most important factors in successful binary options trading. It is the framework from which you base your trade decisions, including your money management rules, and how you go about making money from the market.

Fundamental strategies focus on the underlying health of companies, indices, markets and economies and while important to understand, is not as important to binary options as the technical aspect of trading. Technical trading, or technical analysis, is the measurement of charts and price action, looking for patterns and making educated guesses, speculations, from those measurements and patterns. Strategy simplifies your trading, takes guesswork out of choosing entry and reduces overall risk.

The text book definition reads like this; a plan of action designed to achieve a goal or overall aim, the art of planning and directing operations in order to achieve victory.

When it comes to trading the goal is to 1 make money and 2 not lose money. The number one method of achieving this goal is to use a rules based approach to choosing entries that relies on ages old, tried and true technical analysis indicators. They can be categorized in terms of the tools used, the time frames intended, the amount of risk associated with and many other ways, these being the primary.

A technical analysis indicator is, most often, a mathematical formula which converts price action into an easy to read visual format. Common types of indicators include but are not limited to moving averages, trend lines, support and resistance, oscillators and Japanese Candlesticks.

Strategy is 1 of the 2 pillars of risk management, the other is money management. You control risk by targeting only good signals, weeding out obviously bad signals, and never putting so much money on one trade that it will wipe out your account.

Money management is the control of your overall trading fund. It should clarify trade size, and long term financial management — leaving you to focus only on trading. A well thought out money management structure should simplify:. A trader with a clear financial plan should not need to be concerned with whether they can trade tomorrow, or if their trade size is correct or how they might grow investments in line with their progress.

All those decisions are controlled by managing their overall capital with a clear plan. This is the most common method of viewing price charts. The candlesticks give an easy to read view of prices, open high low and close, that jumps off the charts in way that no other charting style can do. They are the basis of most price action strategies and can be used to give signals as well as to confirm other indicators. These are areas of price action on the asset chart that are likely to stop prices when they are reached.

These areas, often represented by horizontal lines, are good targets for entries and possible areas where price action may reverse. These lines connect highs and lows formed by asset price as it moves up down and sideways. A series of higher lows and higher highs is considered to be an uptrend and a sign that prices are likely to move higher, a series of lower highs and lower lows is considered to be a downtrend and a sign that prices are likely to move lower.

The trend line can be used as a target for support and resistance, as well as a an entry point for trend following strategies. Moving averages take an average of an assets prices over X number of days and then plots those values as a line on the price chart.

Moving averages come in many forms and are often used to determine trend, provide targets for support and resistance and to indicate entries.

There are dozens of methods of deriving moving averages, the most common include Simple Moving Averages, Exponential Moving Averages, volume weighted moving averages and many more.

They can be used in any time frame, and set to any time frame, for multiple time frame analysis and to give crossover signals. Oscillators may be the single largest division of indicators used for technical analysis. These tools, in general, use price action and moving averages in a combination of ways to determine market health.

With any form of trading, psychology can play a big part. A lack of confidence can mean missed trades, or investing too little capital in winnings trades. At the other end of the spectrum, over-confidence can lead to over trading, or increased risk — either of which could wipe an account very quickly.

So the trading psychology of the trader is very important. It can also be actively controlled or managed at the very least, acknowledged. It is another often overlooked area of trading skill, but one well worth spending time to consider.

These are our top recommended trading platforms for trying out your strategy. Developing a trading strategy for the binary options market requires a key understanding of how the market operates in terms of the trade contracts available, the various expiry times, and the understanding of the behaviour of the individual assets.

There are different trade contracts for different platforms. Some binary options contracts do not even require the trader to get the direction of the asset correct. For instance, trading the OUT contract will need the asset to hit one price boundary or the other for profit to be made.

So it takes the trader being able to identify a suitable trade contract to be able to fashion a suitable strategy. The contract type will determine the strategy. In developing a strategy based on the binary options trade types to be traded, there are tools that can assist the trader.

This is where chart patterns , signals services , candlesticks and technical indicators will come in. A simple tool like the pivot point calculator can be used as part of a TOUCH trade strategy with very effective results. Using tools like these will take us to the next part of choosing a strategy, which is how to understand and set expiry times. Expiry times are very important to binary options, because all trades in this market have time limits.

However, not all binary options trades require time limits to be successful. If a trader bets on a TOUCH outcome and the asset touches the strike price well before expiry, the trade outcome is already known and the trade is terminated as a profitable one.

Now when you identify and separate trades that are not so dependent on expiries from those that are, you can better understand what kind of strategy you would be looking at. The binary options market combines assets from different asset classes into one market.

These assets do not behave alike. Some assets are very volatile with large intraday movements. A very clear example is gold. Some binary options assets are not traded round the clock but only at specific times e. The factors that may trigger a massive move in a stock index would obviously not be the same for a commodity or a currency.

Even within the same asset class, no two instruments are exactly the same or behave alike. An understanding of asset behaviour is therefore key to being able to develop a trading strategy for the market. It is up to the trader to study the behaviour of assets, understand the technical and fundamental indicators that will influence the behaviour and price movement of that asset, and then create a trading strategy that will work for that asset.

In this section, we will demonstrate the application of all the parameters we have mentioned above using a simple but effective trade strategy. We do this using our understanding that the effect we want to trade on the hourly chart, will happen in an hour.

The strategy has been used to create a colour-coded indicator, which shows a green arrow on bullish signals and a red arrow for bearish signals. Using this signal, the trade was executed on the binary options platform. The price of the asset EURUSD fell in one hour from the time the signal was generated to the expiry, producing a trade result in our favour.

Basic Strategy For Successful Trading Strategy is one of the most important factors in successful binary options trading. The two most very basic categories of strategy are: These can be trend following or not, long or short term and utilize bullish or bearish positions.

These strategies focus on support and resistance levels, reversals within the range and short term trends as asset prices move up or down from support to resistance and vice versa. These signals have a higher chance of success but take longer to develop and longer to unfold than other types of signals. Money Management Strategy is 1 of the 2 pillars of risk management, the other is money management.

A well thought out money management structure should simplify: Trade size Risk management Future growth Stress A trader with a clear financial plan should not need to be concerned with whether they can trade tomorrow, or if their trade size is correct or how they might grow investments in line with their progress.

Read more on money management. Japanese Candlesticks This is the most common method of viewing price charts. Read more about candlestick strategy Support And Resistance These are areas of price action on the asset chart that are likely to stop prices when they are reached.

Trend Lines These lines connect highs and lows formed by asset price as it moves up down and sideways. Moving Averages Moving averages take an average of an assets prices over X number of days and then plots those values as a line on the price chart. Oscillators Oscillators may be the single largest division of indicators used for technical analysis. Trading Psychology With any form of trading, psychology can play a big part. Read more on trading psychology and learning from experience.

A Basic Binary Options Strategy Here is an example of some basic rules for a binary options strategy. The trend is your friend, only take trend following entries. In an uptrend only enter when prices are near support, in a downtrend only enter when prices are near resistance.

When choosing expiry use 2XCandle length. IE, if you are using 1 minute candles then 2 minute expiry, if 1 hour candles then 2 hour expiry. If the trade fails examine why it did not work, make adjustment if necessary and move on to the next trade. If the trade works move on to the next trade.

Understanding Expiry Times Expiry times are very important to binary options, because all trades in this market have time limits. Understanding Asset Behaviour The binary options market combines assets from different asset classes into one market.

Demonstration In this section, we will demonstrate the application of all the parameters we have mentioned above using a simple but effective trade strategy. This strategy a custom strategy fulfilled all our conditions: