TOP 7 TRADING STRATEGIES OF BINARY OPTIONS
Nowadays, everyone is into the online trading profession. Online trading is the most popular and trending one. Making money is the ultimate goal of every individual living on this planet. But learning the credible method is the main talk of the town.
Binary Options Trading is also not a simple technique. It requires knowledge of its trends and strategies. In this respect, there are some safetradingbinaryoptions strategies to follow for the newcomers and the experts.
Let us dig deeper inside it and explore what is trending.
Why Should You Have a Trading Plan?
Without having a proper plan, no one can accomplish his goal. Especially when dealing with money, you have to be more careful. Investing without a plan is like invested money without knowing how to convert it into a profitable trade.
Therefore, think before you leap. Make a proper plan of action before investing (which assets, stock, or currency to invest and for how long) even joining a broker platform (must check ratings and reviews).
Before heading towards the technique, first, explore the key points.
Key Points of Binary Options Strategies:
The key points you need to speculate while trading binary options are the trade amount and the signal.
#1 Trade
Trade is the amount that traders will manage to invest for maximum profit. It is a critical strategy for beginners. You have to keep your eyeballs stuck on the charts to see the line, bar, or candle patterns. It helps you find out how much you should invest in binary options. There are two strategies to follow:
- Percentage (10℅ of total amount)
- Martingale (get double amount if lost)
#2 Signal
The signal is also known as an indication. The signal interprets that either the price of the asset rises or falls. Your decision to buy or sell the option is dependent on the signal. Therefore, to make this decision, there is a need to opt for a strategy.
The analysis depends upon the following signals given below:-
- Latest Trend (announcements)
- Technical Analysis (pattern of the graph)
Now, moving towards the main agenda!
Top 7 Trading Strategies of Binary Options to Follow:
Binary options trading is not easy as it requires a calm and relaxed mind. The trader must absorb the information and understand the trends and predict the future accurately. Here, we have explained all the techniques that would be helpful in this regard:-
#1 Momentum Strategy
Momentum is a policy in which a trader purchases an asset when its price increases and sells it high when its price is at the apex. It has more profit in it. The detection of momentum depends on the technical indicator and statistical analysis.
It is a short-term trend analysis. It is not a typical trading method that buys on low and sells on high. It focuses on purchasing already high-priced stock. There is a great profit margin in it for a short period.
#2 Straddle Strategy
This technique involves the investment of an option through analyzing the up or down moves of the stock's prices within the same expiry and strike price. There is less risk in it as compared to the potential reward.
It is beneficial for the traders as it has the best plan for long-term trading (less risk, great reward) contrary to short-term trading (huge risk, less reward). It is also known as a risk management method.
#3 Pinocchio Strategy
Do you remember Pinocchio? A wooden puppet with a wish to be a real boy. When he lies, his nose goes big while his body remains small. This technique is on the same plot. A small body and a big nose (shadow) indicate the lie in the financial market.
The expiry time of an option is between 5 to 15 minutes. It takes approximately 1 to 4 hours to analyze the market. Using this policy during 60 seconds expiry is not preferable.
#4 Hedging Strategy
Hedging Strategy is a procedure that refers to the defense of the assets from the risky solutions of the marketplace. It is also known as risk management of the investment.
It may not prevent the loss, but it will reduce the loss. This technique will help to secure the trade by focusing on its derivatives.
#5 Double Red Strategy
Double Red Strategy is a short-term price reversal technique. You can use this method when you have a 5 minutes chart for an option having 5 to 15 minutes expiry time.
One thing to keep in mind is that you can not use this procedure during huge news trends. Moreover, this theory does not favor volatile markets.
#6 Rainbow Strategy
A rainbow strategy is named on the average colored layers moving on the graph. It is a simple and easy technique. Three moving averages when overlap means now there are several or start of a new trend.
It is also known as a 5-minute scheme as it has a 5 minutes time frame with an option time of 5 to 15 minutes expiry.
#7 Candlestick Strategy
The Candlestick technique is a graphical repress station of candles in a series. These candles have categories such as open, close, high, and low prices.
In this scheme, the traders examine the price variations of assets. If precise information on the trend is required the same day, it is preferred.
Last Thoughts:
The best way to analyze which technique is best for trading binary options is to test that technique to get the results. Hoping from one scheme to another will not be fruitful.
You have the top 7 strategies to follow while trading binary options. Keep testing them all one by one and make a record of all of them. It will be handy notes for you to take a quick review of which scheme gives higher profits.
Focus, Practice, And Repeat, this is the recap to this whole article.
If you find this piece of information interesting, share your views in the comment section below!
Have a good trading day!