Profits on binary options - practical tips
At the initial stage it is quite difficult for a new trader to understand the intricacies of binary tradingit's about diversity trading strategies and mathematical approaches, which allow obtaining highly profitable trading statistics. Against this background we decided to classify trading systems and give simple examples different types of strategies, as well as provide some useful recommendations to increase the effectiveness of binary options trading.
So, the necessity of using trading strategies and mathematical systems of capital management is a proven fact. If we approach the classification of binary trading systems from a more or less scientific point of view, all strategies can be divided into the following types:
- Trading on the news
- Indicator strategies
- Non-syndicator strategies (trading on a clean chart)
In addition to this, there are several other approaches of a mathematical nature:
- Profitable overweight
Before we begin our review of the systems, it is worth highlighting the problem of choosing a broker for binary trading. All trading systems regardless of their principle for correct work put forward some requirements: presence of certain technical services, trading platform features, convenient for capital management trading conditions, as well as availability of high-class Demo platforms to study and test strategies. Analyzing the market of brokerage services, we can recommend only a few companies as a reliable partner in this regard. For example, broker Binomo - is a high-class brokerage company with innovative approaches, which offers an absolutely full range of services on the binary market. Among which we can highlight:
- Minimum trading conditions - the size of the minimum trading account - 10 USD, the minimum value of the option from 1 USD.
- Technically top-notch trading terminal with a lot of useful and necessary services
- Powerful analytical support for client trading
- Demo-platform with a full set of functionality to test trading strategies
A broker of such level is convenient not only in the issue of training, but also in the implementation of binary trading with real money. Using the whole range of Binomo company services, a trader, even with minimal experience and knowledge, can quickly achieve success
So, let's start reviewing strategies!
Trading on the news
This approach is based on the principle of market reaction to the publication of statistical data of both macroeconomic global nature, and statistics on the activities of individual sectors of the economy or individual companies. The principle of trading according to this trading strategy is in the rapid analysis of the data at the moment of their release and execution of a contract with the direction, which is subject to the following simple pattern: positive data - trade on the rise in the value of the asset, negative data - execute contracts on the fall in the value of the asset. This approach to binary trading has always been considered the most effective, as it allows obtaining the most accurate forecast of the market movement.
In this type of systems are used so-called indicators - programs that are able to independently carry out calculations according to the current market situation and provide information to the trader to form predictions to get profits on binary options. The list of indicators of different types and construction methods totals several thousands. As simple examples we can give trading systems on the most popular of them:
This is a classic example of trading on an indicator moving averageThe signal for the contract execution is the moment when the quotations break through the price of the indicator's trending muving.
The following example of indicator strategy is based on the indicator MACD - oscillator with precise trading signals, which determines the strength of the trend and its direction. Here the signal is generated by crossing the lines of the indicator and allows you to issue more than 75% contracts with a positive result:
This type of systems has a lot of names - trade on a clean chart, technical analysis of quotations, Price Action strategies. This approach, which, by the way, can be considered the most ancient and proven, uses simple regularities of quotes movement, which have a high repetition cyclicity, a kind of market movement laws. For example, a well-known quotation movement in accordance with the trend and the market reaction to the touch or breach of trend levels (support, resistance). Here, in most cases, exactly these market levels are used, which are built in the form of visual or graphical lines on the quotations' chart:
Contracts are executed after touching and rebounding from the trend level, and transactions can be opened both in the direction of the general movement of the trend, and in both directions of price fluctuations, for example, when trading in the price channel:
The use of trading systems on a pure chart is a long proven method of effective trading in the financial market. In addition, this type of strategy can use in its work the patterns of Japanese candlesticks (candlestick patterns), as well as the graphical figures that form the quotes in the implementation of their fluctuations:
It is a mathematical system that is aimed at obtaining an overall profitable result. It was originally used in gambling. The whole principle of its work is to constantly double the value of the transaction when you get a losing position. For instance, you have made a contract with option worth $1 and got a loss, then you should make out the next contract with 2 dollars volume and with the profit of it you will cover the losses of the original contract. All in all, we are guaranteed to get an overall positive result. This trading system is quite controversial: some believe it is inefficient and sometimes harmful. Our opinion - using martingale in conjunction with a highly effective system of another type and trading contracts with minimum value volume, such as those offered by our broker Binomo, this system brings excellent results and can be the most effective way to avoid losses.
Trade position averaging
This is also a mathematical way of making profits on binary options. It uses the principle of adding trading positions. A simple example, if you made a contract in the DOWN direction, and the price impulsively went up, contrary to the forecast, we make out a certain number of additional contracts with the direction of the original contract. As a result, when the market returns to the main trend, we will get either a fully profitable series of transactions, or additional contracts, which by their profit will completely cover the losses and give a small amount of income:
This trading strategy uses the so-called mathematical advantage of trading positions in the profitable direction. A market participant makes out a contract in any direction, and then, using short-term fluctuations in quotations, makes out positions using the direction of market movement, while the number of contracts should as a result overlap losses on all transactions and bring profit.
It is worth noting that it is quite difficult for a beginner trading principle, which requires fast calculations, as well as a good reaction of the market participant, because the contracts should be executed very quickly.
The list of systems and their types given in this material is a brief illustration of the basic principles of making profit on binary options. Of course, there are strategies with combined approaches, which simultaneously use the rules of trading on different types of strategies, as well as different authors' systems, based on the observations of individual market participants. Trader's fantasy and market laws allow creating any systems. The main task is for them to give high results and lead a market participant to financial success.