Binary Options Trading Strategies
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1. Successful Binary Options Trading Strategy
Successful binary options traders approach the market with three key tools:
Some great Binary options strategies
Money management strategy
The use of signals one way or another.
These tools are absolute necessities for any trader looking to be successful. This
article will explain the basic of these three binary options strategies, and provide you
with links to all relevant fields. It is the perfect starting point for you to create your
own binary options strategy.
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1. Trading strategy
Binary options are short term investments. Therefore, timing is just as important to
your success as correctly predicting the direction of the market. Your binary options
strategies for trading should clearly define the signal you want to trade, and when you
want to enter the market when the signal occurs. Based on technical analysis, there
are a number of possibilities:
Trading the breakout: You can trade the market breaking out of a continuation
or a reversal pattern. More accurately, you have to define whether your will
invest in a binary option in anticipation of the breakout, in reaction to the breakout, or in reaction to the pullback. Which option you chose depends entirely on
your preferences.
Trading trend lines: Trend lines can be traded the same way as support and
resistance levels. You can invest in the impending turnaround when a trend
approaches a trend line, and you can invest the price breaking through a trend
line.
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Trading percentage retracements: In a trend, retracements usually end at a
percentage of 40 to 60 percent of the prior advance. Investing in a turnaround
in price direction around these levels of a retracement can provide you with
good trading opportunities.
Trading the gap: Sometimes prices take a big jump in either direction. The
created gap is likely to close again. You can invest in the closing of the gap with
a binary option.
Trading technical indicators: Technical indicators can provide you with great
insight to what the market is doing. Applied the right way, technical indicators
can also generate signals you can trade with binary options.
Trading candlestick formations: Candlestick formation can provide you with
short term indications about future price movements. By being able to recognize and interpret candlestick formations, you can find many attractive trading
opportunities.
Trading a combination of these techniques: Only the most risk-tolerant traders
should base their trading strategy on only one signal or technique. Usually, the
results of your strategy can be improved by combining techniques. For example, you could trade Candlestick formations in the direction of the main trend
around percentage retracements. A strategy like this should help you win a
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2. Money management strategy
Without a good money management even the best trading binary options strategy
will ruin you eventually. In binary options, you will inevitably lose some trades. Therefore, the main goal of your trading approach cannot be to win all trades, but to win
enough trades to end up with a net profit in the end. Money management is the tool
that will help you achieve that.
Good money management consists of a number of rules, most importantly that you
should only invest a fixed small percentage of your overall capital in one trade. This
percentage should not be higher than 5 percent.
3. Trading on signals strategy
Many binary options strategies depend on technical analysis where you look for
certain patterns in the way the price of an asset moves, and try to make predictions
about future price movements based on these patterns. This is a great methodology.
It enables you to gain a deep understanding of the markets, and use this knowledge
to make money.
TIP: The best way to build the right money management strategy is to use
an automated trading tool. Today there are many binary options trading
system that can analyze tones of financial data and to give you more than
94% accuracy.
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How to base your binary options strategies
on signals?
Signals are simply recommended trades generated by very sophisticated pieces of
software. These programs absorb and process enormous amounts of market data
and uses advanced algorithms to identify good trading possibilities. This might
sound almost like cheating, after all computers are tremendously good at this sort of
thing, but there’s no need to worry.
There are essentially two different binary options strategies that you can use that are
both based on signals. The first is to subscribe to a signals provider. This is a company that has as its only function to identify promising trades. They use their own computer algorithms to do this, often in combination with personal expertise and market
knowledge.
By subscribing to a signal provider you receive a certain amount of signals in return
for a monthly fee. The cost is in most cases around $100 per month. There are a lot
of signals providers out there. Take care when choosing a provider. Make sure they
provide signals with a strike rate in the region of 70% – 85%.
How to base your binary options strategies
on robots?
The second strategy you can use that is based on signals, is employing a robot. A
robot is a software that is even more advanced than the ones used by signal providers. A binary robot also processes huge amounts of data and uses algorithms to
identify promising trades. It also does one more thing - executes trades on your
behalf. This means that by using a robot you are effectively outsourcing all your trading. An automated system will scan the markets, do the analysis and even take care
of the decision making process. This offers a number of advantages.
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If you would like to go with a robot-based strategy, we recommend you sign up with
this provider. Your Binary Options strategy determines whether you will win or lose
money as a trader. Many traders, therefore, are constantly looking for a better strategy to increase their profits.
Our best suggestion to users would be to get started with a truly genuine piece of
investment technology. A fine example of such would be the HBSwiss System. It has
very high return rates, thanks to the fact that it features a unique Swiss trading principle.
If you are looking for alternative strategies our team would recommend you to
choose one of the following automated tools – this way you can maximize your gains
and minimize the risk of financial losses.
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2. Which kind of Binary Options strategy is
right for you?
Is there such thing as the perfect binary options strategy?
In real life binary trading, the winning percentage of each strategy will be relatively
constant. The percentage of successful trades, however, will vary greatly, depending
on which trader applies a certain strategy. If you like to be right, you should choose a
Binary Options Strategy that will guarantee you a high winning percentage, even if the
return per trade is not as much as with a more risky strategy.
See a list of strategies with high winning percentage Click Here.
If you can live with winning only slightly more than half of your trades, and if the prospect of many losing trades in a row does not scare you or make you abandon your
strategy, a more risky Binary Options Strategy might be better suited for you.
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A Binary Options strategy must suit
your character
There is no such thing as a perfect strategy for every trader. There is only a best strategy for each individual trader. You should not simply copy what someone else is
doing or choose a strategy because of the money it mathematically can generate if
you apply it perfectly. The success of a strategy is determined by your ability to follow
it as close to 100% of the time as possible. Choosing a strategy that suits you, your
tolerance for taking risks, and your tolerance for being wrong is far more important
than choosing a strategy with high potential return that you cannot apply. Chose a
strategy you feel comfortable with and that will generate a profit.
When you are new to Binary Options it may be a smart idea to try several strategies
with a demo account before you use them with real money. This way, you can eliminate strategies that are not working for you without losing real money, and you can
learn about your own preferences.
60 Seconds Binary Options Strategy will provide every trader with a greater insight
to how the market works. To create your own 60 Seconds binary options strategy first
of all, you can look for trends in short time frames. These trends are short lived and
most of the time does not obey to trend lines as strictly as trends in longer time
frames. Therefore, you have to be quick when trading them. As a 60 Seconds trader,
you have to work with less secure predictions than other traders. On the other hand,
you will have an abundance of trading opportunities compared to other strategies. A
60 Seconds binary options strategy can generate tradable signals every few minutes.
This means, although you have to accept a higher percentage of losing trades, if you
still manage to make a profit, a 60 Seconds binary options strategy can help you
make a lot of money in a short time.
Read More About The 60 Seconds Strategy Click Here.
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Candlestick Strategy - A candlestick chart is used to visualize the price movement
of an asset. It can compress all the information of a given time period into one candlestick. This enables you to get all the important information you need quicker than
with a regular price chart, and derive even more information, which you then may use
for your own candlestick strategy.
Each candlestick represents the price movement of a certain time interval from a few
seconds to days, and consists of a body and a wick. The body represents the opening
and closing price of the asset in the given time period. If the closing price is higher
than the opening price, the body color is white and the candlestick is classified as
bullish. Is the closing price lower than the opening price, the body color is black and
the candlestick is bearish. Sometimes the body colors are replaced by red and green,
grey tones, or other colors. These color schemes work the same way. Candlesticks
create patterns and formations. These formations can consist of one single candlestick with a special form or more candlesticks that create a certain pattern. A skilled
trader can use these formations to predict future price movements.
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74 – Big-black-candle - The Big Candle is an example of a formation created by a
single candlestick. The Big Candle is characterized by an unusually large body that
opens and closes very near the maximum high and low of the time period. If the candlestick is white, this likely indicates the beginning of a longer bullish movement. If
the candlestick is black, this likely indicates the beginning of a longer bearish movement.
You can use this information to purchase options in the direction of the candle and
predict further price movements in this direction. In a smaller timescale you should
use options with a shorter expiration time, for example 30 seconds or 60 seconds
options if your timescale is one minute or less. The larger your timescale is, the more
option types you can use.
Double Up Strategy - The double up strategy is a strategy which any binary options
traders are using to maximize their profits. This strategy does not require any chart
study or complex analysis and is very easy to understand and implement. It is used
when a trader is in a strong positing and the investment is looking very good to make
profit. Using this strategy the traders can double up their initial invested amount
while the parameters will stay the same as when the original investment was made.
There are some downsides of this strategy. It is useless if you losing or you are not in
a very strong position. This is also important to understand that the double up strategy is basically a feature and all the binary options brokers do not offer it.
Strategies for Boundary Options
Boundary options are binary options with a higher payout than High/Low options that
do not require you to predict the future market direction exactly. They take away the
hardest part of trading while rewarding traders with a higher payout. Boundary
options provide you with the unique advantage of not having to predict in which direction the market will move in the future. You can win your option by simply predicting
that the market will move far enough in either direction. To win your binary option,
you only have to estimate how far the market can move over a given period of time.
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To know how far the market can move in the three periods until your binary option
expires, you can use momentum indicators such as The Average True Range. The
ATR calculates how far the market has moved with each single period in the recent
past. By multiplying the ATR’s value with the number of periods until your boundary
option will expire, you get the maximum market movement in this time. To use this
kind of strategy, you do not need to generate a trading signal.
Strategies for Short Time Frames
Short time frames feature a very unique market environment that requires special
strategies. To become a successful binary options trader, you should not try to
predict what you cannot predict. You have to change your approach to trading.
Instead of trying to predict whether an asset will rise or fall, you should use a more
gambling type strategy. With this kind of strategy, you are not trying to predict what
will happen. Boundary options are the ideal asset for short time frames, because they
do not require you to predict which direction the market will move in. All you need to
predict is whether the market will move far enough. That is perfect, because that is
what volatility indicators are for. Volatility indicators such as the ATR tell you how far
the market has moved on average over the last few periods. You can use this knowledge to predict how far the market can move until the boundary option your broker
offers you will expire.
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Strategies for Currencies
Currencies are one of the most popular and most used asset types to invest in a
boundary option. Currencies are not only influenced by the supply and demand created on a stock exchange, but also by supply and demand created by fundamental
influences such as imports, exports, and people exchanging currencies privately. You
can use both factors to create the perfect trading strategies for currencies:
Trading long term trend lines
Binary option are short term investments. Therefore, you cannot profit from the typical long term trends in currencies directly. You can, however, profit from them indirectly. Long term trends have a significant influence on the market. This influence
translates to shorter time frames: When a long term trend line dictates the market to
turn around, you can trade this reversal on a shorter time frame.
Trading the news
Currencies are heavily influenced by fundamental factors. News about a change in an
important fundamental factor will have an immediate, significant impact on a currency pair. When a central bank increase or decrease its base rate or prints new money,
for example, the market will react strongly. As a trader you can use these events to
win a binary option. Since you do not know which way the market will react but know
for sure that the market will react strongly, scheduled news can also be a great opportunity to invest in a boundary option.
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Strategies for High / Low Options
High/Low options are the binary options type that can generate the highest winning
percentage. These options require you to predict whether the market will rise or fall
over a given period of time. You will win your binary option if the market has moved
by only one pip in the right direction. Here are a few strategies you can use to successfully High/Low options trade:
Trading the breakout is one of the most commonly used strategies with binary
options. Breakouts are significant events that occur whenever the market completes
a chart pattern, such as a continuation pattern, a reversal pattern, or any significant
event in a trend.
Many conventional traders have placed stop orders or limit orders at these points,
which all point in the same direction. When the market triggers the price level, it
triggers these orders and creates a sudden surge in supply or demand. This surge will
create a strong movement called the breakout. You can use the breakout to win a
binary option.
Trading moving average crossovers - For this strategy, simply use two moving averages: One with a higher number of periods and one with a lower number of periods.
The moving average with the lower number of periods will follow market movements
more closely, while the moving average with the higher number of periods will be
slower to react.
Swing trading - In a trend, swing traders try to benefit from each movement from
high to low and vice versa. This type of trading approach is perfect for High/Low
options. When you recognize a weakening swing, invest in a High/Low option in the
opposite direction of the swing. Use a medium to long expiration time of around five
periods. The movement should have enough time to develop. While swing trading
takes some time to master, it is a great strategy that generates many trading signals.
Therefore, it is perfect for any trader trying to make money fast.
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Strategies for Touch Options
Touch options are a binary options type that provides the highest payouts of all
binary options. A successful trader of touch options can make higher profits than
with any other option type. Since the ATR predicts that the market should reach the
target price in two periods, you know that you have a good chance to win this touch
option. Should you find a touch option with an expiration time shorter than the
predicted duration of the movement, you should not invest in a touch option. In that
case, you can trade the breakout with a High/Low option. To trade this strategy successfully, there are a couple of signs you should know:
1) Future market movements are uncertain
When you are trading touch options, you are trying to estimate the volatility of future
market movements. That is a hard task, since even that change the market environment could occur at any time. Therefore, the longer the expected movement has to
last for the market to reach the target price, the riskier is the investment. New events
could make the market turn around or delay the movement past the expiration time
of your touch option.
2) Using a second indicator makes sense
To trade the strategy outlined in this article effectively, you could use a second indicator that generates the trading signal. With the ATR you can then evaluate whether it
makes sense to invest in a touch option.
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Strategies for High Risk Traders
a) Trading swings in a trend with touch options
If you diagnosed a trend, you can estimate how far each single movement from point
3 to point 2 and vice versa will move. This enables you to invest in a touch option and
make a nice profit with each swing. The touch option will generate a high payout, and
since you are trading every single swing of a trend, you will have plenty of investment
opportunities.
b) Trading breakouts with touch options
There are plenty of opportunities to trade breakouts: Continuation and reversal
patterns, Point 2s, Resistance and support levels etc. If you want to generate many
signals, you have to trade most of these opportunities. If you trade them with touch
options, you will also be able to generate the high payout you need to make a lot of
money in a short period of time.
c) Trading gaps with touch options
If you are able to distinguish the different gap types, investing in gaps that are likely
to close with touch options is a strategy that can help you generate high returns.
Since the size of the gap lets you predict the range of the movement relatively exactly,
you can win a binary option with a high payout almost every time you found a closing
gap.
For More Winning Binary Options Strategies Click Here
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In order to start trading binary options each trader is required to open an account
with broker. The minimum deposit may vary according to the broker’s policy but it is
usually around $250. We have tested more than 367 platforms and we have chosen
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Out team from www.top10binarystrategy.com is wishing you a profitable and exciting
trading with the top recommended automated tools and binary options brokers in the
industry. We advise you to check out our website frequently in order to stay updated
about the latest improvements and trends on the financial market.
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