Binary Options Trading Strategy
A trading strategy is a specific algorithm of a trader’s actions that they perform to execute a trading deal using binary options when a certain situation arises on the market.
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Binary options have been rapidly gaining popularity in the financial market for several years in a row. This is due, first of all, to the obvious simplicity of working with them: almost every beginner can master options. However, the problem with binary options is that when the trader makes transactions at random, they will close with the same ratio of profit and loss – 50% to 50%.
Only even this ratio will not be enough for breakeven trading, let alone to earn anything at all on binary options. And all because, on average, the profitability of each trade is 85%, but the loss ratio is already 100%. Therefore, to make a profit the number of completed trades needs to reach 65% and higher! A trading strategy is a peculiar scenario of a trader’s actions for increasing the amount of positive deals to a level higher than 65%.
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The essence of trading strategies is the use of a system of rules based on the work of automatic analysis tools (indicators), simple patterns of market movements (technical analysis), and fundamental indicators. We call the technical analysis the analysis of the price movement chart. It can be based on its own, unique metrics, as well as on technical indicators, which generate signals about the appearance of certain conditions on asset price charts for profitable deals.
Additional strategies and brokers have emerged over recent years, providing traders with improved conditions. One of these platforms is Pocket Option, which stands out with its high profitability – up to 92% return on each successful trade. Additionally, Pocket Option offers unique social trading features, allowing users to copy the trades of successful traders, which is particularly beneficial for beginners.
This platform combines ease of use with a wide range of functionality, making it attractive to traders aiming for high results. Furthermore, pocketoption.com provides deposit bonuses and fast deposit or withdrawal methods, which are also important factors when choosing a broker.
Strategies of trading on fundamental indicators depend on the events happening in the world, which influence the quotations of one or another asset. For example, news trading strategies are based on data published, which can be quarterly company reports, political news, or speeches of heads of central banks.
Strategies for Earning with Binary Options
In addition to the most important trading strategies used by exchange players to obtain a stable income, and the analysis of the market situation on the futures market, many methods significantly increase the effectiveness of trading techniques used, resulting in improved overall statistics on binary options trading. As a rule, such methods are combined with the main trading strategy.
The Method of Averaging Trading Positions
This method to improve trading efficiency is most often used for channel and trend trading strategies when making inertial movements by the quotes of a financial product beyond the levels of channels and trends. This method is very simple in itself. According to the rules of trend methods, trading positions are opened at the moment of resistance or support levels on the rebound from them.
When such a trading signal triggers, a trader instantly makes a deal. But it also happens that assets break through the level without any preconditions quotations of the trading. It is at this point and starts to operate a method of averaging transactions.
How does it work? During the inertia beyond the level of the main trend, it is important to enter into additional trading positions in the direction of the slope of the trend channel and trend movement. As a result of such trading, we will receive income on a series of trading positions, there will be an increase in the total amount of income.
This method can be combined with trading strategies that include oscillator indicators with the ability to accurately determine the trend reversal, as well as the end of local corrections to increase trading efficiency.
The Hedging Options Strategy
This method is used for additional earnings in the options market and to reduce the probability of financial risks. What is the principle of options hedging? This method of increasing trading efficiency consists of executing an additional trading position on the opposite side of the original trade when the main trading position is located in the profit zone.
It is important to pay attention to the fact that after the execution of a trade upwards, the quotes of the traded asset begin to rise, and then at a price reversal, a hedging trade position is executed. As a result, we will get profit on either one of the deals or on both of them at once. In the first case, losses on one of the transactions are compensated, and in the second case, we gain additional income.
The Martingale Strategy in Binary Options
What is the principle of operation of the Martingale method in binary options? It is based on a system of doubling the trade bet each time a loss is made on a trade. As a result, the losses incurred before are covered and there is a slight increase in the overall size of the trading deposit. It is important to double the trading lot size even before getting a profitable deal. Thus, overall trading statistics will always be profitable.
Best Strategies for Binary Options
Choosing the best strategy for binary options also depends on the trader’s personal qualities, their preferences, and the choice of trading option, namely the expiration time. Short-term (turbo options) where you have to quickly analyze the market and make a decision are better for the impatient ones.
Those who want a thoughtful analysis and long-term work should work with options with long-term expiry. In any case, you have to understand – there is no winning strategy, you will never make a profit without risk. On the whole, there is no ideal strategy, every trader has their best trading strategies over time.
Some of the top brokers, such as Pocket Option, offer attractive deposit bonuses. For example, with a deposit of $100, traders can receive a 50% bonus, which significantly increases the starting capital, especially important for beginners. This can be a great addition to a strategy, as the increased capital allows for more trades and better risk management.
Another popular broker is Quotex (go-to site), which appeals to traders with a minimum deposit of just $10 and excellent profitability, making it a great choice for those new to binary options trading.
Below is a selection of what we believe to be the best binary options strategies available today:
- Trading Strategy “Scalping on RSI”
- 30-minute “Puria Method” Strategy
- The Best Binary Options Strategies
- More than 350 strategies in our blog
Variety of Strategies for Binary Options
Strategies for binary options are divided by expiration dates, that is, by the time when the option expires and the result of the concluded contract is fixed.
Below are links to informative articles on strategies for the most popular expiration dates:
And also, for the most popular methods of building strategies:
- Trend strategy
- Stochastic
- RSI
- Copytrading
- Scalping
- News trading
Still, you have to realize that without using any binary options trading strategy, it will be difficult to achieve good results. By starting out correctly here, you can gradually dive into the fascinating world of financial markets and come out with a stable income. Of course, you can deny the effectiveness and the value of a single option trading strategy, but the negative results are more often due to the lack of qualitative training for trading.
Some brokers offer bonus programs that can influence a trader’s choice. For example, Intrade.bar provides bonuses for deposits made via USDT (TRC20), which is relevant for those who prefer to work with cryptocurrencies. It is also worth mentioning that Alpari offers cashback, making it a good option for traders looking for additional ways to minimize costs.
Only the right approach to start trading in the market, to learn and test your knowledge on a broker’s demo account will allow you to achieve decent results. It is worth remembering that this is work, and it is worth devoting a lot of time to it in order for it to bring you income, not disappointment. Among an impressive number of binary options trading strategies, it is important for any market player to find a trading system which will be comfortable and convenient for him. The advantages of such techniques:
- Risk reduction
- Increasing the effectiveness of bidding
- Using the ready experience of traders, proven methods for years
- Comfortable and calm trading without psychological stress from uncertainty of the result
In this search for techniques, it is important to consider different factors, such as the number of hours you are willing to devote to trading per day, the peculiarities of assets, indicators etc.
Some players sometimes argue in their reviews, in their blogs that some super-strategy for binary options or even a secret strategy for binary options helps them to earn, about which they are silent in the community of traders. It is simple and straightforward, comfortable, works steadily and the trading results surpass all expectations.
But is it possible to say so and is it possible to find such a winning method for every trader? I think it is possible to say so, and every market participant can have such a trading system. Often such methods are simple options trading strategies that all traders know about, but not every player knows how to use them correctly.
When starting to work with indicator systems, the players not always go into the essence of the instruments, they are superficially aware of the oscillators, which distorts the understanding of the market situation.
In addition, it is not enough to find your own trading system, you have to understand that the market is unstable, it is influenced by the economy, the political situation, etc., and all these realities need to be adjusted by your methodology.
However, as professionals often argue, it is the proven trading strategies for binary options that are the key to success in the difficult and unstable conditions of the financial markets. While the network presents a variety of effective strategies for binary options, among them there is no universal, guaranteeing 100% success. If you are offered a super-method with a high income for a fee, you should not trust such tempting offers because they can turn out to be a trivial scam.
The binary broker also can offer you proven trading techniques absolutely free of charge. Sometimes, in addition to clear explanations and comments, you can watch a binary options strategy video – it is convenient and comfortable. Inexperienced market players who have not taken the time to study and choose a methodology quickly become frustrated with trading. Binary options strategies are something that all traders need to keep in mind, regardless of their experience or accomplishments in the financial markets.
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