How to Avoid Over-Trading in Binary Options ¦Profitable Binary Trading

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Types of binary options: which is the most profitable to trade?

Types of binary options – the more profitable to trade?

According to one independent expert, Binary Options, there are even weather changes. In his own words, he wanted to emphasize that the terms of option contracts can be absolutely anything. However, brokerage firms offer the average trader, as a rule, the following options.

Type 1. Above / Below Options
The most popular type of option contracts. The trader assumes that the price will be higher than the current value, or lower. For example, if I buy the option “higher” and the American currency will rise in price at least by a penny – my profit. Instead of the dollar, there may be a bitcoin exchange rate, and indeed, anything.

Transactions of this type are recommended for both beginners and professionals. Price fluctuations can be predicted based on simple technical analysis methods, so there will be no particular difficulties in trading.

Another important point. “Higher / lower” is a fixed-income option: the trader’s earnings do not depend on anything, he is taken for granted, unlike the contracts of the following type.

Type 2. Touch Options
It is necessary to predict whether the price will affect a certain time interval of one or another level (most often there are two of them – above and below – you need to choose any). The price will stay outside the level or not – it does not matter (but sometimes this parameter matters), the main thing is that the touch is fixed.

Agree, it’s more difficult to predict the movement, and therefore the stakes here are higher. If you plan to trade touch options, read about measuring average volatility (volatility).

Type 3. Simple Barrier Option or Range
A complicated version of the second type of options. Now the price should not touch one of the levels, but hold on to it. The trader predicts whether the price will be above the upper or lower level to the expiration date.

So, there are three types of options – with one level, with two levels per touch or “step over”. All the rest of the variety that is found on the sites of brokerage firms is a derivative of the three species we have examined.

Let’s look for your profitable binary options trading scheme

Searching the Best Binary Options Trading Scheme

The importance of strategy in trading binary options you will hear not the first and not the last time. Why do many binary option strategies not work? The whole point is to apply the right strategy at the right time. Also, in order for the strategy to use, you need an understanding of the situation and how this strategy works. Always start with learning the simplest strategies. When the understanding of their time and the appropriate situation of use comes, you will be able to start earning trading binary options. Find your test strategy. Use it as an indicator in order to understand how to apply it or a specific part at the right time. This will significantly allow you to avoid the risk and much earlier to profit from trading binary options.

Use your own trading scheme

It is always important for yourself to distinguish several types of trading strategies for binary options. If we take the criterion of the impact on various factors in trade, then we can identify technical and fundamental strategies.

In the first case, with the fundamental strategies for trading binary options, the emphasis is on the news component. This includes macroeconomic factors that will influence the market of binary options, depending on the changes in political, economic and globalization processes. In other words, everything that has an impact on financial markets will have a direct or immediate impact on the binary options market.

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With regard to technical strategies, in general – this is the forecasting of returns using market analysis tools, stock indicators. When using technical analysis, all the indicators that enable you to predict the level of profitability or risk are taken into account. Technical strategies are one of the main analysis tools for any trader who wants to trade wisely.

What are the types of strategies for trading binary options

Everyone under the word strategy means an “image”. In each case, it will be slightly different, but the essence of this term still remains unchanged. Why do I need a trading strategy in binary options? First of all, no one wants to lose their investment. But for this you need to definitely have structured risk management. In most cases, it is based on technical analysis. The trader needs to calculate all the possibilities of obtaining maximum profit and minimizing the risk of losing investments. Traders use many different trading strategies. Naturally, they are all aimed at maximizing profits.

In the context of the above information, there are four types of strategies:

  1. Strategies that are based on trend tracking. They are aimed at analyzing the trend curve. Concomitant concepts will be “entering the trend”
  2. Strategies in which we follow patterns in price fluctuations. The essence of this strategy is to track the repetitions of price fluctuations and be able to recognize such a price figure or a number of them.
  3. Strategies with tracking of long-term market movements, as a rule, are periods of time a day or longer. They are mostly used by more experienced traders. Such signals can be very strong, but it will be quite difficult to recognize their beginner.
  4. Strategies for tracking short-term trends. Their essence is in the search and ranges, which can be traced in short lines. The trader must use tools, analyze these phenomena. Here you need to learn to recognize the fluctuations in the trend curve well and make quick decisions. Suitable for more experienced traders.

Tools used in technical analysis

Japanese candles. One of the most common types of analysis, which became known to many more with all the fond of Forex. This analysis tool is well suited for tracking signals from most types of strategies. They are very well traced downs, spikes, peaks and so on. When working with this tool, it is possible to test and combine many different strategies. Moreover, the tool is suitable for almost all traders, both beginners and professionals.

Support and resistance. These are certain levels where the price ceases to fall or grow in its entire history. When sellers fix profits and the price starts to grow – there is resistance. When traders start buying up assets at favorable prices, support is formed. Support symbolizes the halt in the growth of asset prices. Most often, support and resistance on the charts are displayed as a horizontal line, they identify the areas of price mapping and its rotation.

Trend lines. Track the ascending and descending trend, displayed on the general chart, have a direction that corresponds to the direction of the trend. Used to designate points of resistance and support, it makes it possible to search for new entry and exit points. The uptrend line is based on connecting a series of higher minima on the price chart while the downtrend line combines a series of lower highs.

Moving averages. This is the line that displays the average value of prices for a certain period of time. There are several main types of moving averages created. These include simple, exponential, weighted, and others. Several sliding lines with different timeframes are often used with input signals, which are accompanied by the intersection of moving average lines.

Oscillators. They are made for technical analysis. It, in turn, includes series of various mathematical calculations, average numbers. This is an integral part of the trend display, its strength, price movement and other characteristics of the market.

Reversal Trading Strategy for Binary Options – How It Works

What is a Reversal Trading Strategy?

How to Use Reversal Trading Strategy?

If you take any chart with a 15-minutes timeframe as an example, you will see that prices rise all the time during some continuous trend. All of the oscillators, most probably, are in the overbought zone and it seems like a reversal is going to happen very soon. But it would be a huge mistake trying to catch a reversal with such a strong trend. It is much more productive to bet according to the trend. Most of the profitable strategies are based on exactly the same approach. All of the bullish candlesticks have an upside shadow which means that the price was not going up all the time, there were bounces happening. We could use those bounces to enter the market and get a good profit as the result. It is obvious, of course, when you look back on the history. But how can we identify an entry point in real-time conditions? It is rather easy to do and we will tell you how.

If you like this strategy, you might also be interested in this Hanging Man Trading Strategy

Advice for Trading Reversals

If you see a strongly marked trend on any chart, then it would be very easy to find an entry point using a shorter timeframe for the same chart. It is very important to understand that every bullish or bearish candlestick consists of many full-size candles of a shorter timeframe, which can be analyzed as well.

We change the timeframe from 15-minutes to 5-minutes and we add the following indicators:

  1. Bollinger Bands;
  2. MACD;
  3. MA with period 10.

Examples of Signals from Reversal Trading Strategy

Now as we remember that the longer timeframe has a strong uptrend, we can start trading on retracements. The bets have to be done in the direction of the longer timeframe trend, in our case, upside only.

Look at what signals do we get from the strategy:

  • Deal opening rules for the uptrend of the longer timeframe:
  • The chart has to be between the upper Bollinger Band line and MA with period 10;
  • MACD histogram has to raise;
  • Bets should be made on the candles’ bounce to MA10 with expiration for 1-2 candlesticks ahead.
  • Deal opening rules for the downtrend of the longer timeframe:
  • The chart has to be between the lower Bollinger Band line and MA with period 10;
  • MACD histogram has to decline;
  • Bets should be made on the candles’ bounce to MA10 with expiration for 1-2 candlesticks ahead.

We can catch such awesome deals in this simple way on price bounces from the main trend. We called the binary options trading strategy as profitable not just like that but because it is suitable for all of the timeframes. But if you are going to use timeframes 15-minutes and 5-minutes as we showed you the example above, you will be getting much more binary options signals than say timeframes of 1-hour and 4-hours.

How to Propit in 5 minutes in Binary Options

One of the advantages of binary options trading is that expiry time can be very low. The narrower the expiry time limit is used, the faster the profit can be obtained by the trader. This facility is certainly good news for short-term traders, especially scalpers who like to open several trading positions in a day. In ordinary forex trading, short-term traders only get a little profit for each of their trading positions, where the opportunity to increase profits is only by opening as many trading positions as possible so that the profit from each position can meet the daily profit target.

In contrast to spot forex, binary options allow short-term traders to achieve large return profits even though the duration of trading only takes place in minutes. This can happen because traders can choose their own profit percentage and amount of capital. The percentage of profit and the amount of capital can be arranged in such a way as to limit losses or maximize profit opportunities. Therefore, it is not surprising that binary options are a favorite place for short-term traders.

Each binary options broker has a different minimum expiry time limit. There are those who provide expiry time of 1 minute, some even allow trading positions to take place in just seconds. Although trading is only done for a short time, it does not mean that this method is done without strategy. There are many binary options trading strategies based on the types of time frames, one of which is a 5 minute strategy.

The 5 minute trading strategy in binary options is one of the best and simplest high-frequency strategies. The main idea of ​​using this strategy is to open trading positions on market conditions that allow for short-term reversals. This method is easy to learn for those of you who are new to binary options, because it can make it easier for you to do analysis, both technically and fundamentally. For starters, you can use charts with a time frame between 1-5 minutes, with an expiry limit of 5 minutes.

The binary options strategy for trading in just 5 minutes has several characteristics, including:

  • Very simple and easy to understand for beginners.
  • Makes it easier for beginner traders to learn the basics of technical and fundamental analysis.
  • Very suitable for forex binary options.
  • Produce good trading opportunities, with a success percentage of up to 72%.
  • Only involves a few techniques and trading rules.
  • Allows traders to open up to more than 20 trading positions for 1 currency pair in a day.
  • Trading risk can be minimized by adjusting the amount of capital for each option position.

Trading in 5 minutes with News Trading
As with forex spots, binary options trading with news trading bases the placement of options on economic news from countries related to the currency pair traded. To be able to analyze price movements fundamentally, many traders use the economic calendar to find out when economic news releases have a major impact on the value of a particular currency. Usually, large influential data will be marked by 3 stars or 3 bulls, depending on the economic site that provides the calendar.

Usually, forecasts on economic calendars can make it easier for you to open trading positions at the beginning of the trend. But if you only use expiry time 5 minutes, it’s good if you wait until the data has actually been released, because there are likely to be different results than expectations.

For example, the US NFP, which is one of the most important fundamental data for the USD, achieved worse-than-expected results. You can immediately place the “put” option for USD / JPY or choose the “call” option for EUR / USD or GBP / USD as soon as the results are released, placing an expiry time of 5 minutes.

In other words, the 5-minute trading opportunities that can be taken from the emergence of fundamental data are:

If the results of the data released are as expected:
Do not open a trading position.

If the results of the data released are better than expected:
Placing a “call” option for currency pairs whose base currency is affected by the news. (Example: take the “call” option for EUR / USD after Eurozone inflation data shows better-than-expected results).
Select the “put” option for the currency pair whose quote currency is affected by the news release. (Example: choose the “put” option for USD / JPY shortly after Japanese GDP data is reported to reap better than expected gains).

If the results of the released data are worse than expected:
Selecting the “put” option for currency pairs for which the base currency is affected by economic data. (Example: choose the “put” option for GBP / USD after the BOE decides to cut the benchmark interest rate lower than expected).
Place a “call” option for the currency pair whose quote currency is affected by the data release. (Example: take the “call” option for EUR / USD after US NFP data reaches a worse-than-expected result).
All option positions that can be opened are set to expiry time of 5 minutes. This is because in the period of 2 minutes the price has not shown a definite trend, whereas if the option position is placed on a trend that has been running for more than 5 minutes, the price has the potential to rebound. Therefore, expiry time over 5 minutes can be more risky on your option trading. In this case, 5 minutes is considered the ideal time for short-term traders to place their options in accordance with the results of the data that has been released. As long as the economic reports that are indicators of great impact, this method will almost certainly bring the 5 minute option you end up in-the-money.

Trading in 5 minutes with technical indicators
Of the many indicators that can be applied to trade binary options in 5 minutes, this article will choose the MA (Moving Average) to give an example of using this strategy technically. One of the main keys that need to be considered in the use of MA is setting the time frame and the MA period itself. There are 2 rules that must be complied with by binary options traders, namely:

  1. When the price fluctuates from a higher level than the MA to a position lower than the MA, the option chosen is “put”
  2. When the price fluctuates from a lower position from the MA to a higher level than the MA, the option that should be placed is “call”.

The application of a 5 minute trading strategy with MA can be seen from the example chart below:

In the chart of the above price movements, the 5th SMA is placed on the EUR / USD chart with the M5 time frame. The trading opportunity created by the above conditions is to place the option “put” when the candle is formed below the MA. Conversely, when the candle is formed above the MA, the option that should be chosen is “call”. If both methods can be implemented properly for the above market conditions, the option trading will end in-the-money in just 5 minutes. If you take a trading opportunity from the SMA-5 into the option position that is opened every time there is a crossing on the MA line, then you will be able to profit continuously. Isn’t this a very suitable strategy for short-term traders to make profits in a short time? Moreover, the magnitude of the chosen profit level does not affect the level of trading risk as long as the amount of capital used is not enlarged.

What To Consider In Binary Options 5 Minute Trading
Choosing an expiry time of 5 minutes does allow traders to make profits in a short time. In forex spot trading, chart observation at a low time frame is rather not recommended because of the large amount of “noise” that can generate false trading signals. It is also one of the important points in trading binary options with this 5 minute strategy. To overcome this, you can apply the use of fundamental or technical analysis that can minimize errors in trading positions.

In addition, there are several other things that need to be observed by binary options traders, including:

1. Practice first on a demo account. Although this 5-minute binary options strategy looks easy and profitable, not all traders can apply this method to their trading plans. Applying a strategy that suits your character and personality is one of the important factors that can bring success to trading binary options.

If you feel comfortable with a trading strategy, the process that is carried out will feel easier and not burden trading psychology. Therefore, make sure you can maximize this strategy in the trading system that you are running. You can take advantage of the demo account facilities provided by binary options brokers. This method is a solution for those of you who want to test the accuracy and opportunities of this 5-minute trading strategy without jeopardizing the safety of your trading balance.

2. Keep running risk management in every opened trading position. It is common knowledge in the world of trading if there is no strategy that can produce a 100% probability to predict the next price movement. Therefore, the opportunity for loss should also be seriously considered so that traders can take into account the trading risks that can be borne. The use of a maximum of 10% of the amount of trading capital can be an anticipatory step if the trading position that applies the 5-minute strategy ends out-of-the-money.

3. Don’t open the option position when the speech from the Central Bank leadership is in progress. At certain times, the leaders of the Central Bank will hold a speech to announce the latest policies, which usually will greatly affect the value of the currency. Therefore, it is better to avoid opening positions at this time, because speeches from the leaders of the Central Bank can be a momentum to drive price changes in a direction that is difficult to predict.

4. Avoid overtrade as well as possible. Even though binary options trading with 5 minutes expiry takes place in a fast period of time, it does not mean you are recommended to open positions immediately as soon as your trading ends. Both success and failure, it’s good if you wait for the right momentum to re-enter the market. In this case, both utilizing fundamental news with a large impact and waiting for the formation of a candle below or above the MA line, can be a trading signal for placing new options.

Conclusion
The binary options facility that offers short expiry time is one of the ease of trading that can be utilized by short-term traders. Here, option positions that only last in 5 minutes allow you to harvest profits in a short time. Money management settings and the risk of trading in binary options can also be done more simply, namely by determining the amount of capital and the level of profit you want to achieve. Thus, this method can be said to be a trading management method that is better than a forex spot, where you have to measure the percentage of capital and take a stop loss level to minimize losses that may arise.

Best Binary Options Brokers 2020:
  • Binarium
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    The Best Binary Options Broker 2020!
    Perfect Choice For Beginners!
    Free Demo Account!
    Free Trading Education!
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  • Binomo
    Binomo

    Only For Experienced Traders!

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