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Learn How To Trade Binary Options Successfully And Profitably
How to trade binary options, is a question frequently asked by beginners including our readers. So, we aim to give you a proper solution through this article.
Binary options are popular because of its simple trading nature, with a fixed return percentage. Despite its simplistic nature, many traders use on their binary trades far more often than you think.
It boils down to reasons such as lack of trading knowledge, experience, or choosing the wrong broker. Whatever the reason may be there must be a clear plan ahead of trading, so you don’t face ill-consequences in your trading result.
Before enlightening you with the step by step guideline on how to trade binary options profitably, we will give a short brief on what binary options are.
What Are Binary Options?
We are going to explain a basic concept on binary options here, but for detailed information, read what is binary options trading article.
Binary Option is an investment type where you have two outcomes, all or nothing. It has also a fixed expiration.
You have to accurately predict the outcome with an expiry time to make a profit. Either you will win a trade or lose all the money that you have invested for a particular trade. Moreover, you can perform binary trade in two ways.
- Manual Trading
- Automated Trading
In manual trading, you do all the hard-work and place the trades yourself using trading strategies . But in auto-trading, automated trading software does the trading for you, using a build-in trading strategy.
Which method you use for trading depends entirely on your preference. If you are a new trader, you might take help from a trading robot in exchange for a price. Or you can learn the basics of trading, and do it yourself.
Binary Trading Example
You already know through our citation that binary options give you a fixed payout and loss amount. To power-up your trading journey, you must have to follow some rules.
Before jumping to those specific points, we will try to connect your existing knowledge with a small example.
James Chen from Investopedia explains binary options trade with the help of an example.
Assume stock XYZ is currently trading at $64.75. A binary option has a strike price of $65 and expires tomorrow at noon. The trader can buy the option for $40. If the price of XYZ finishes above $65, the option expires in the money and is worth $100. The trader makes $60 ($100 – $40).
If the option expires and the price of the stock is below $65, the trader loses the $40 they put into the option. The potential profit and loss, combined, always equals $100.
5 NoteWorthy Steps To Trade Binary Options
What you are expecting from this phase?
Hang on! Let me guess. Maybe, you might think that we will share with you a spell so that you can earn a lot of money. But, the section will focus on the 5 noteworthy steps on how to trade binary options.
- Choose a regulated broker
- Analyze the market and asset
- Practice on a demo account
- Make an initial deposit
- Start Live trading
As each step is very powerful, so our recommendation is to read each step without skipping.
# Choose A Broker
Choosing a broker without evaluating some factors can bring disaster. On the other hand, the retail investment market is large and have a lot of scopes. According to a report of SEC,
approximately 7,600 investment advisers registered with the SEC that serve retail investors, with over $12 trillion in retail client assets under management, and approximately 34 million clients.
Isn’t it crazy!
The actual craziest thing is that one has to choose one or more than one broker from thousands. Here, we will mention some factors that you should keep on mind before selecting any broker.
- Demo account
- Minimum initial deposit
- Ease of use
- Variety of assets
- High Payout percentage
- Fast withdrawals
- Multiple modes of payment
In addition to that, you refer to our list of binary options broker . It’s not necessary that you have to stick to one broker. No broker is perfect, and one broker may not suit all your needs. Don’t hesitate to trade with multiple brokers.
Taking all the above factors into consideration, we have prepared our list of recommended brokers that you can trade with.
These brokers meet all the requirements such as regulation, offering a demo account, huge asset index, high payouts, fast withdrawals, easy-to-use trading platform, and much more. Here is the list of brokers Binary.com , IQ Option, and BinaryCent that we think will offer you the best binary options trading experience.
# Analyze The Market & Asset
The trading market is unpredictable and changes every sec. Three main types of analysis bring an optimal trading result.
- Fundamental Analysis
- Technical Analysis
- Sentimental Analysis
Here, an economic calendar works as a ground from where traders use data to forecast the market movement. As there is “no” best method of analysis, so you have to pick the most viable option depending on time-frame and asset information.
# Practice On A Demo Account
Registering an account is free of charge with most brokers. All it takes is your vital information such as an email address, your first, and last name. Once you have created an account, you need to practice trading through a demo account.
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Train yourself with the help of a demo account until you create an unbeaten situation. Educate yourself on the basic concepts of binary trading. Understand what strike price, expiry time, call, and put option, etc. Familiarize yourself with the different ways you can trade binary options.
Just because the funds and the outcome in demo accounts don’t hold any real meaning, it doesn’t mean you should trade recklessly.
Trade on the demo account exactly how you would live trade. This practice will develop your trading skills and build valuable experience.
There is no fixed duration on how long you have to practice on a demo account. Take as long as you need. Finally, when you feel confident enough, you can step up to real trading.
# Make An Initial Deposit
The initial deposit amount varies from broker to broker. You need to deposit on the trading account to carry out live trading. On the other hand, there is a big difference between an investment and deposit.
An investment is a price what you pay to get the future value. Meanwhile, the deposit is a certain amount of money that one needs to open an account.
It is wise to start with a small deposit amount like $10 to $20.
# Start Live Trading
You can start trading on a real account once you are familiar with the ins and out of binary trading. Select your preferred asset and choose your investment amount. Depending on your prediction, buy a call or put option.
Place your trade, and wait until your trade expires. In the next section, we have listed some tips and techniques on binary trading to make your trading successful and profitable.
How To Trade Binary Options Successfully And Profitably – Best Way To Trade
We already discussed a few steps above. Those steps are the principle that one trader should follow whether he is professional or not. After that, you need to turn your binary options trading into a successful profit machine.
Don’t miss out the chance by skipping points that we covered below. Follow these tips to ensure you don’t lose money while trading binary options.
- Choice of assets
- Start trading with small
- Eliminate emotions from trading
- Choose the right expiry time
- Follow the market news
- Risk management
- Knowledge is power
Choice Of Assets
As you can trade with a large number of assets, so trade those assets that you are most familiar with. Do not take unnecessary risks by trading in markets that you cannot predict.
Successful binary trading depends on how well you can predict the market. Follow the market news before executing trades. Diversification of your portfolio is one way of reducing your overall trading risk. But it doesn’t mean you should diversify to assets that may not be profitable to you.
Stat Trading With Small
You may have heard about the risk management where you have stick on either 1% or 2% rule. It is a general rule of thumb for traders.
90% of traders failed in trading because they have lack of knowledge on money management. Investing a huge amount of money will not help you to increase profits.
So, at first, start with a small amount like $10. After gaining valuable experience, you can start increasing your trade size. No matter how much you practice on a demo account, trading on a live account is a different scenario. As there is real emotion involved, which brings us to our next point.
Eliminate Emotions From Trading
Professional traders are not super-human. They also fight to control their trading emotions. Eventually, all traders must go through a cycle of market emotions.
Controlling emotions is not sky-rocket. However, you will find a difference in gratitude of a winning trader and a losing trader. No wonder, a low expectation level can save you from a massive failure.
Stop dreaming about to get rich quick and follow the 7 secrets that will help you to improve your trading emotions or psychology.
Choose The Right Expiry Time
It is may seem like a matter of preference or a trivial issue, but even expiry time is a crucial factor when it comes to binary options trading.
For example, a trend was supposed to reverse within an hour. But if you placed a trade with 2-hours expiry, the trend would have reversed by then. And, you had lost the trade.
Follow The Market News
Whatever underlying asset you may trade, you need to be informed on the latest global events, and news associated with that asset. Many traders build strategy depending on the market news. So don’t skip on that, and act accordingly.
For example, if there is negative news regarding the gold and a price drop is imminent, log in to your binary options trading platform, and open a put position on gold.
Reacting appropriately to market news can bring in more trading success than you think.
Risk Management (Hedging)
Unless you are a pure gambler looking for absolute results, you should make use of hedging. Hedging is a money management strategy used to protect your profits. In this way, if you are wrong on your prediction, you lose money from your call option, but you regain that back from the put option.
Protecting your investment by buying a binary option contract opposite to your initial contract is hedging. Hedging may reduce your overall profit potential, but it also protects your capital.
If you quite confident about your prediction but still want to hedge, invest the lesser amount in the hedge position compared to your main position.
Knowledge Is Power
Trading education is one of the big factors that play a vital role in success. You need to constantly educate yourself with trading knowledge. Even though binary options look easy and simple, there is a lot that goes into constantly turning your trades into a profitable one.
Moreover, you are less likely to commit mistakes and perform better trading analysis when you are equipped with trading knowledge.
Learn To Trade Binary Option (Manual Vs. Automated Trading)
You can either manually trade binary options or can use binary options software which will do the trading for you.
When you trade manually, you choose the asset, the expiry time, and most importantly, the decision to call or put. Everything depends on you alone. Moreover, you have to set a strategy using indicators and trend lines to make a decision.
In the case of automated binary options trading, a binary robot does all the work for you. It is a programmed software that makes decisions based on certain algorithms.
On the other hand, most binary options robots allow you to customize settings such as investment per trade, risk level, indicators, and choice of assets.
However, if you want to completely leave your fate at the hands of the trading robot, you may do so. Or you can put manual effort also by building strategy.
We would recommend a mix of both auto and manual trading for the best results. We have compiled and reviewed the best binary option trading robots for you.
Binary Options Trading Guide
On this page, we will go through the basics of binary options trading. When trading with a binary option robot, you do not necessarily need to know anything about binary options investing, but it is useful to be aware of the mechanism by which option robot operates. Plus, if you are interested in binary options trading so much that you do not want to use the robot, you can do everything yourself. In addition, remember that the robot does not work with the best binary options brokers, so if you want to take advantage of every good money making opportunity, it is also good to know at least a little bit about binary options and option signals.
How Binary Option Robot Can Change Your Life? Check This Out!
TABLE OF CONTENT
How to Make Money with Binary Option Robot
Top Binary Option Robots in Russia
Claim your free binary option robot, get started with three easy steps:
- Name of Robot
- Min. Investment
- Min. Deposit
1. Your Binary Option Robot will analyse the market and decide, which asset (currencies, indices, commodities and stocks), is right to trade at that point in time.
2. The Binary Option Robot Will Predict the Price Movement
Your robot will assess a wide-range of factors, and then make a prediction on how the assets price will move, saying: Call (up) if it believes the price will rise and Put (down), if it believes the price will fall.
3. Decide on how much you want to Invest
Then you need to decide how much you want to invest in the commodity and when that investment will expire.
4. Collect your Earnings
Finally, you collect your earnings (the good part!)
What Are Binary Options?
Binary options are definitely one of the most fascinating new investment instruments. Their history goes back as close as the year 2007 , when they first got a lot of advertising with Option Clearing Corporation proposing to authorize binary options , and in the following year, with the Securities and Exchange Commission approving the listing of cash-or-nothing binary options.
The investor has two possible options: “Call” when the value of the property is expected to rise , and “Put” when the value of the property is expected to decrease. In order to prevent price manipulation ( for example: an investor makes the first binary option trade “Call” with a very large sum of money, and after that, buys a very large amount of stocks of that company, inflating the stock price in order to force a binary option investment to be successful), many brokers use a volume-weighted average of trades at the expiration time. In most cases, price manipulation would not be even possible, because the investment objects are major companies , such as Google and Alibaba Group , whose share prices are almost impossible to be affected by an individual investor .
At some point in our lives, we’ve all been affected by some type of a global financial crisis. The end result is normally devaluation of assets, recession, unemployment which negatively impact global trade and investments.
Banc De Binary observed the aftermath of a financial crisis and decided to make an investment from it. After the 2008 financial meltdown, Banc De Binary founders anticipated for a demand in simpler ways to trade in the financial markets. As a result, they designed a simpler instrument of trading that was both accessible to experienced and disheartened investors. And that is how binary trading began. Today, they are quite a number of binary option platforms that offer on-line trading. What’s more is that you can use a binary robot trading software which will do all the trading for you.
Binary options trading is a fun and exciting way to invest.
Binary Options Defined
So, what is a binary option? A binary option is an investment tool that makes profit from price movement in stocks, currency pairs, among other commodities. This trading investment is so simple in that it gives traders only two possible options: yes or no. It is the dual choice that resulted to the name ‘binary’ or the commonly used term ‘Call’ or ‘Put’.
Now that we have already established that profits in binary trading are derived from price movements, it is important to understand the trends that result to these movements. Trading can be easy but identifying the patterns that lead to a successful trade can prove to be a daunting task.
The global market is never constant, it keeps changing. If you want to make the most out of your trading, you probably should identify strategies that will make use of these changes. Read through to discover some of the strategies that you need to look out for.
1. Look Out for Breakout
A breakout normally occurs when prices trade within a close-fitting range. The main idea behind breakouts is to identify a price range in which the present price will ‘break through’ as it moves towards a trading range. This means that you need to identify a potential break out level and further anticipate for it to prevail in the market. The stronger your breakout level, the more likely you will experience a strong move.
When looking out for a breakout level, you also need to identify a market’s momentum. This means that you need execute your trades in times of low liquidity. This is usually towards the end of the market when the volume is stronger.
Key considerations for a breakout trading strategy
- It is important to adhere to correct timing in order to avoid whipsaws and pullbacks that normally arise from a break.
- Identify the right market for trading. Use currency pairs because they tend to have more breakout opportunities as compared to other binary assets. What’s more is that currency pairs carry the levels volatility required in breakout trading. Breakout requires an asset that shows a considerable amount of movement during a set period of time. As a result currency pairs works best.
- Avoid early anticipation of a break: wait until your breakout level confirms.
- Remember that defining your breakout level will highly depend on the type of asset you’re trading and the time period that has been set.
Beware of fake outs: this is simply a break out that is not real. There are times when the market tends to test a resistance or support line. In such an instance, the price can briefly shoot above or below and right after go down again to generate a spike. Avoiding a fake out largely depends on experience and an authentic trading system. It is important to note that choppy markets are characterized by fake outs. Smoother markets on the other hand are less likely to generate them.
Basic situations in a binary options trade. Tom and Jim are basically “betting “against each other.
2. Watch Out for Retracements
A retracement is defined as a price reversal that usually takes place within a larger trend. A trend is generally seen as the direction of a market or the direction of a price asset. The key point here is that these price reversals are temporary. They do not imply to a change is a larger trend like breakouts.
If you open an asset chart, you are likely to see a retracement. Even in a strongly trending market, you will notice little peaks or dips which counter the general movement before resuming its course.
How can I use a retrace to my advantage? When you have spotted a trend, it is important to wait for the first retracement to complete before entering a trade. A completed retracement tests resistance or support which further acts as a confirmation of a certain price direction.
Let us say you are interested in buying gold probably because you believe that its price is going to skyrocket. Your immediate reaction is to place a ‘buy’ on the binary option for gold. However, when price retraces you will find yourself loosing. There is also the possibility that you’re misinformed about the trend; the signal you are observing might be a fake out and not a break out.
On the other side, you can wait for the initial retracement to happen and right after enter your gold trade. This way, you stand a better chance of making the right move since the counter movement will have been tested by the market with support being held firm. It is good to understand that you will still be faced with retracements ahead. Even the strongest of trends is usually faced with minor retraces.
3. Identify Support and Resistance Levels
Identifying support and resistance levels is one of the most reliable strategies in binary trading. A support level is defined as that level that keeps the market from attaining lower levels after it has been rejected at least twice. Resistance level on the other hand is defined as that level that prevents the market from attaining high levels after being rejected at least twice.
There are normally three things that happen after a market has hit a resistance or support level:
Knowing what the market is likely to adapt to after attaining these levels makes it easier for one to design a trade strategy based on that information.
You can only identify support and resistance levels through plotting. This allows you to see where the price is hesitating upon current levels. It also allows you to see other future areas where price might likely hesitate at. These levels are commonly termed as “pivot levels”. Pivot points can also help one to figure out the most viable expiry time for a specific trade.
How can one trade by using support and resistance levels?
For an upward trend, the price has to go above the resistance level. If it does not go higher than the resistance level, it will either maintain its position above support level, form a range or take a downward trend. You can go a long way when prices go beyond resistance level. This is because it forms another peak which is usually higher than the previous level.
For a downward trend, the price has break right below the support level. If this does not happen it will maintain its position above the support level, form a range or adopt an uptrend. With a support level you can go short when prices break below this point. When a price breaks below this point, it goes lower to form another support level which is lower than the previous one.
Points to note:
- The more a price is tested at a certain support or resistance level without attaining a breakout, the stronger that resistance or support level is.
- When support levels are broken they become resistance levels and when resistance levels are broken they become support levels.
4. Recognize Market Conditions
One strategy that will take you far while doing binary trading is recognizing and interpreting different market situations. The binary market can be highly compared to the weather, it comes in different patterns. One time it will be smooth sailing, the other time it will be choppy and unpredictable. Listed below are the various examples of a market condition.
- a) Ranging Markets
This is a type of market that keeps moving back and forth between higher highs and higher lows making it difficult to attain a breakout. It can be tough to profit from a ranging market but there are different types of trading that could feasibly help you become profitable. These include:
Boundary or trade ranges: they are designed to help one profit when price is trading within a particular range or channel. When you are range trading, what you’re basically implying is: price won’t go beyond the defined range boundaries. If indeed price does not go beyond the set boundary then you make a profit.
No touch trade: this type of trading implies that price will not touch a specific set value at a given time period. If price touches the set value, too bad because you lose. You win the trade when price does not touch the given value. Payout usually depends on how close the set value is to the current market value for a specific asset.
- b) Trending Markets
This is a type of market that is characterized by prices moving towards an obvious direction through a systematic and well-defined fashion.
The dominant movement in a trending market is upwards and downwards. Profits can be made by spotting trends as they develop.
- c) Chopping Markets
Many people confuse chopping markets with ranging markets. They have some similarities but unlike a well behaved boundary market, choppy markets feature whipsaws, spikes and other various forms of misdirection that can easily trap an unwitting trader.
The easiest way to identify a choppy market is through trading bars. A choppy chart is characterized by lots of bars that are coupled with relatively short bodies and long wicks. When you identify long wicks it means that the market has been testing high and low prices but is still facing too much resistance or support to move anywhere.
Is it possible to profit from a choppy market? In rare cases it is but most people don’t trade on it. The wisest choice is normally to wait until things smoothen again.
5. Use Trend Signals
How can one spot a potential breakout? Through using methods that easily identify breakout signals. Basically, a trading method identifies when to enter trade based on fundamental indicators, events and price changes. A trading method can also help identify the best trade. Listed below are some of the prominent trade methods that can be used to identify trend signals.
- Technical analysis: this is a trading method that revolves around technical analysis. You are simply required to plot indicators on an identified chart. This will help to spot breakouts.
- Fundamental analysis: it involves looking at important events, new releases which can drive price movement towards a particular direction.
- Price action: this is simply the process of identifying certain formations in bars or candlesticks that signal the ability of price to break out from its range.
Tips and Tricks that will get you Ahead in Binary Trading
Apart from binary strategies, there are a few tricks and tips you can add up to your sleeves to make sure you always make the right trading choice.
Find a working strategy
There are numerous strategies out there. Finding one that personally suits you can prove to be a daunting task. It will involve the process of testing numerous systems and strategies. When you identify one that works, stick to it as you continue learning all the ins and outs of it.
Stick to longer expiry dates
It is normal to want everything to happen “now”. Have you ever heard of the saying that ‘good things happen to those that wait.” This is more true when it comes to binary trading. Markets have a lot of noise and it can be easy to get tempted to trade on smaller time frames.
This can work but in most times, the trade usually goes right for a while then it takes a turn towards a downward trend..This happens all the time and it can be very frustrating.
Trading with longer expiry dates cancel out the option of listening to market noise. However, this is not to say that you should never use short expiry dates. With experience and the right strategy, a short expiry time can have its moments.
Put your Emotions in Check
Statics indicate that the biggest reason why most traders fail is because they never take charge of their emotions. Trading psychology is a difficult aspect to overcome and it might take years before you can fully function out of emotions.One tip that will help you is to always
go with what you know rather than that gut feeling.This means submerging yourself more in the learning process in order to make decisions on facts rather than intuition.
Identify the right broker
Identifying the right broker is essential in making a successful trade. There are numerous traders in the market and it is up to you to identify a legitimate, reputable, trustworthy and professional broker.
Some of the things you need to look out for when identifying a broker include: withdrawal times, customer support, tradable assets, payout percentages, regulation among others. At the end of the day, a broker should fit within your needs and preference.
Practice makes perfect
If you want to become a master in binary trading, it boils down to three things; practice, practice and more practice. You don’t have to use real money when practicing. With demo accounts you can trade without spending a dime. Try back testing by using various historical charts while identifying different assets and at the same time looking for trading opportunities. Try and find out what will happen if you followed particular entry rules within different market situations.
In order to achieve success, it is recommended that you present yourself at a trading market for at least one hour a day. During that time you can make up to three or more trades. In the first few months it is important to dedicate yourself to learning.
Don’t fall in love with just one asset or strategy
The market is never constant, it keeps changing. So is the assets behavior. Committing yourself to just one strategy or asset is setting yourself up for a pitfall. For you to succeed, you have to be dynamic and rational. When a market change occurs be ready to adjust it to your trading performance. Make sure you do your homework right by looking out for all the adjustments needed for your daily trading routine.
Binary options trading is sometimes extremely fast paced.
The Future of Binary Options Trading
It has been seven years since the platform for retail binary option trading first rolled out. What does the future hold? Knowing what the future holds will help you get ahead of time and in return experience greater success.
According to experts, the future appears to be bright and fully loaded with opportunities for growth. Some of these opportunities include:
New Asset Types
Technology and innovation is continually resulting to the existence of new trading assets. The number of assets that can be traded is expanding. There are brokers who have started to offer crypto-currency Bitcoin as an item for trading.
Today, traders are demanding more asset ratios from their brokers such as gold verses silver or oil verses gold. One thing that many brokers will never tell you is that you can succeed by scrambling for these new asset ratios. Make sure you watch out for them.
Experts are also foreseeing the probability of new binary option contracts which are based on economic data releases. For example it may soon be possible to bet on high impact news release. These include building permits, consumer sentiment surveys, among many others. These releases can cause specific assets to hit or not hit specific price targets.
New Trading Types
The advent of new trading types is one thing that savvy traders should look forward to. Japan has taken the front line and has already set the ball rolling by launching a new trade platform that features exciting trade types that conform to regulatory conditions set by FFAJ. An example is the introduction of 0-100 binaries
Use of software and technology
Existence of new software has made trading to be easier than it used to be. The market is already faced with trading robots which have an automated software attached to browsers, This allows them to communicate with trading platforms and in return execute trade for traders operating on an automated basis.
Binary trading is still a fairly new investment tool and many may shy away from it. The truth is that binary option trading is an investment just like any other. It possess its unique advantages and disadvantages. However unlike many other investment vehicles, binary options:
- Have fast returns: for many investments you have to wait for at least six months before you start experiencing high levels of profits. With binary options it is possible to see returns right after 60 seconds. Most have an expiry date of one day or shorter.
- It’s the easiest form of investment: all you need to do is learn a few tricks and you are good to go. What’s more is that you will be trading only on a dual basis. It doesn’t get any easier than that.
- Have high returns: it is possible to experience a return of 70% and above.
With that said, it is time to learn how binary trading actually works. If you play close attention to the strategies mentioned above, you may be surprised with the amount of money you will be able to earn. What’s more is that we’ve provided you with some tricks and tips that will help you get ahead.
If you want to know the main differences between binary options and forex trading, I recommend you to read the following article:
- Binary Options vs. Forex (Differences explained . You will also learn which one fits you better and why . )
How to trade with binary options? A simple four-step guide.
Step 1: Choose the trading asset. First, you have to choose your preferred trading asset. You have hundreds of different options at your disposal, such as stocks, currencies, commodities and indices .
Step 2: Choose the direction. Next, you need to select a direction. If you believe that the price will increase, select “call,” but if you believe it will decrease, select “put.”
Step 3: Choose the desired investment amount. You need to choose the amount you wish to invest. This can be anything from a few dollars to tens of thousands of dollars.
Step 4: Choose the expiration time. Select the time when you want your investment to expire. This can be anything between 30 seconds and several months.
After this, you just need to wait and see if your investment went right.
Example of a binary options trade
The starting price of gold is $1,167 at 12:30 p.m., with an expiration time of 60 minutes.
If a trader thinks that the price of gold will close at or above $1,167 at 1:30 p.m. , he/she can buy a “call” option contract on that outcome. If a trader thinks that the gold price will close at or below $1,167 at 1:30 p.m. , he can buy a “put” option contract. If the value is more than $1,167 at the expiration time, the “call” investment will win , but if the value is less than $1,167, the “put” investment will win .
How do I earn money using Binary Options?
Earning with binary options is easier than you may initially believe. You just need to know if the value of the trading asset is more likely to move up or down. Remember that not every trade needs to go right; it is sufficient that you make a profit in the long term. Please check out the following simple example of how to make money with Binary Options.
Step 1: Choose the right trading asset
This is the main point of Binary Options trading. You should start thinking about what trading asset could be the most suitable for you. Do you have first-hand knowledge of some asset? Do you have a strong view on what direction the value of a particular trading asset will change? Do you have friends or relatives who have strong knowledge of some trading asset? If so, can you use it in your investment?
If you answered yes to any of the above questions, you know where you should start. However, if your answer to all questions is no, then you have in front of you a little bit bigger task, but the reward is also in the best case really good.
How do I find the right trading asset without prior investment knowledge?
One of the most important factors is to follow the financial news . Is there something happening in the world now which you could benefit from in your binary options investments? You can also explore what trading assets brokers are offering and which would be fastest for you to learn. Alternatively, are there any trading assets that you are particularly interested to learn better?
One of the advantages of binary options is that you can make big profits from the mere fluctuations in the value of assets. For example, if the value of gold rises and falls back and forth from one day to the other , but it remains within a few percent of the same range in what it was a year ago, you will still have the opportunity to earn large sums of money, if you have correctly anticipated the direction of the change. On the other hand, if you had invested directly in gold , the value would be close to the same one that existed a year ago .
Step 2: Choose the right trading strategy
Binary Options Strategy Articles:
As a binary option investor, you have a number of different strategies and options at your disposal . I recommend trying several different strategies and use the most profitable . Once you have learned how to productively use one of the strategies, you can gradually increase other ones into your repertoire. This way , you will always have several different options for obtaining as high yields as possible. Next, we will discuss the ten most popular and profitable strategies.
Strategy number one: Binary option pairs
In binary option pairs trading , you have two different trading assets and you need to know if either value will increase compared to the other within a desired period . This is a particularly good strategy in situations in which you think that a specific event will raise the value of another trading asset and decline the value of another . Even if your guess would go a little bit wrong, and the value of both declines, you can still win if that which you originally though would decline actually declines even more .
Gold vs. Silver is one of the most popular trading pairs
Strategy number two: Long-term binary options
Long-term binary options are similar to stock investing. The expiration time may vary from a few hours to several days and even months. This is my personal favorite strategy. It is ideal for individuals who invest larger amounts of money and want to carefully analyze the trading assets before investing.
Strategy number three: Sixty-second binary options
Sixty-second binary options are the precise opposite of the long-term binary options. They are a short-term form of investment in which the risks are considerable , but if you learn how to make profit with them, only the sky is the limit for how much money you can earn with them. Sixty-second options are suitable for investors who are able to accept the fact that if they want to win a lot of money , they have to be willing to lose a lot from time to time.
Strategy number four: One touch binary options
When you are trading with one touch binary options, you make profit when the rate goes above or below the set target price. On the plus side is the fact that once you hit the target price, your investment cannot go wrong , even if the value of the asset changes in the other direction strongly thereafter.
Strategy number five: Binary options ladder trading
Ladder trading means what the name suggests: you have many different levels, each of which are paid a certain percentage of yield. This form of investment is suitable for those cases in which the investor believes he knows which direction the trading assets value will follow , but it is not sure at all of how much value eventually will change and in what time frame.
Ladder trading is an excellent strategy for skilled investors. You can get very high returns in a short time.
Strategy number six: Pinocchio strategy
This is one of the clearest and simplest strategies. When the value of the trading asset rises, it is expected to fall next , and when value of asset falls , it is expected to rise. The investor always invests in the opposite direction of the market trend. It operates under the assumption that markets often overreact to certain news, and because of this, value changes momentarily more than it should change, correcting itself, sooner or later.
Candelstick charts are an excellent tool for for those that uses pinocchio strategy
Strategy number seven: Support and resistance lines strategy
Support line is the point of which value does not change lower and the resistance line is the point of what higher value does not rise. These often apply particularly in certain commodities, such as the value of coffee or sugar. When values are sawing a certain range within the framework, it is easy for the investor to benefit, when he discovers that the value is approaching one of the two levels and will most likely will go in the other direction very soon.
Strategy number eight: Trend strategy
Trend strategy is also a very simple strategy, and something that both novices and experienced traders often use, considering it is really good and functional. In trend strategy , you invest in the market trend ; if it is rising, you place a “call” investment, but if it is descending , you place a “put” investment . You can use support and resistance lines for help to assess when the trend direction changes.
Strategy number nine: Martingale & anti-martingale strategy
Martingale is a strategy especially and frequently used in gambling . In martingale , you always double the bet when the investment goes wrong. This way , you make profit even if you just get one of those investments to go right. Martingale is really a high-risk strategy ; you rarely lose when you use it, but when you lose, the amounts tend to be big . The reversed version of this strategy is anti-martingale. Through it, the stakes are only doubled when the investment is correct ; wins are rare, but the sums tend to be big . Please read more about the Martingale strategy on the following article:
- Binary Options Martingale Strategy (Can you earn tens of thousands of dollars using it? All the secrets of this strategy are now being revealed for the first time.)
Strategy number ten: Fundamental analysis
Fundamental analysis is often used in stock trading ; it focuses on the determination of the real value of the investment object , based on various economic indicators , such as : the overall economic picture, the profitability of the industry , and future growth prospects. Making fundamental analysis requires a lot of time and effort, but the end results obtained can be generally utilized in various ways.
You can also mix the strategies as desired . For best results, I recommend you to first study a single strategy properly.
Step 3: Choose the right broker
Choosing the right broker is extremely important, as there are some dishonest operators on the market who are trying to ruin the reputation of honest ones by acting unethically. We only mention the most honest and reliable binary option brokers on our recommendations . If you only invest on our recommended brokers and open accounts through our links , you can have peace of mind and more time to focus on the most important thing : making money by investing. Our number one recommendation is IQ Option , as they have the smallest minimum deposit ($10), the best trading platform and the best bonuses.
Binary Options Trading Strategy – Best 60-Seconds Strategies
Today we are going to share our binary options trading strategy with you. This strategy is designed to help you identify whether you’ll like trading binaries and teach you how to trade binary options the right way. If you prefer to play it safe over gambling, you’ll need a strategy or tactic to help you master binary options and other trading activities. This is where our TSG team comes to the rescue. We will provide you with the best binary options strategy.
The main reason we’re interested in learning about trade binary options is the fact that binaries simplify what we’re already doing in Forex. At the same time, binary options also allow us to make more money in the process. We are also controlling the risk.
Binary options are easy to understand. This is coming from someone who has little or no experience in the area. If your favorite approach to trading forex is to jump in on a fast price movement and ride the intraday trend for as long as the momentum lasts, you can learn how to make money trading binary options very quickly.
When we first discovered binaries, the light bulb in our heads turned on. We figured out the same thing that we’ve been doing in Forex can be done. But walk away with 75%, even 95% winning trades because we only needed to get the direction right. No need to worry about how many pips we could grasp in the process.
And that, my friends, is the real beauty of binary options.
What are Binary Options?
Binary options are a form of derivatives that have a fixed profit or loss. Trading binary options is simple. All you need to do is ask yourself a simple yes or no question. Will the price of the underlying asset be worth more than the strike price at the expiration date?
Now, let’s start by understanding how binary options work.
Essentially, we can trade binary options for any type of instrument. Whether it be commodities (Gold, Oil or Silver), Forex exchange currencies (EUR/USD, GBP/USD or USD/JPY), or stocks (Amazon, Tesla or Twitter).
So, the first thing you need to decide upon is to select the asset to trade.
Second, before submitting our trades, each of these instruments has a current value at any given point in time. How to trade binary options depends on our trading skills. It is used to predict where the current value will be some time in the future. In other words, we must use our skills to predict the market direction. This will determine our success in trading binary options.
The market can only go up or down. If we believe the current value will go up in the near future, then we buy a Call option. On the other hand, if we believe the current value will go down in the near future, we buy a Put option. Read more about call options vs put options.
Third, we need to determine what the most critical aspect of trading binary options is. The expiration time will ultimately determine if you’re making a profit or not.
Trading binary options require you to correctly forecast two things:
- Whether the market will rise or fall.
- Your forecast needs to be accurate during a certain time frame – called the expiration time.
If you’re right on the market direction by the time of the expiration time, you earn a profit. Being wrong means you incur a loss. The way binary options works is that if you’re right on the market direction, you’ll get a percentage of what you initially invested in.
Typically between 75% and 95% and in some cases, even 100% of your initial investment, depending on your Binary Options Broker.
Supposing we’re wrong on the trade, then we’re going to lose the whole amount invested in the short term.
We have made a nice infographic that highlights the four steps on how to master binary options trading.
Now we’re going to focus on step two, which is how to predict the price movement. If you manage to figure this out, then knowing how to make money trading binary options will be a piece of cake for you.
Now, before we’ll outline a method on how to make money trading binary options, we always recommend taking a piece of paper and a pen and take notes on the rules of the best binary options strategy.
In this demonstration, we’re going to look at the buying Calls.
The Best Binary Options Strategy
Our team at Trading Strategy Guides is ready to share with our beloved trading community our 60-second binary options strategy. We don’t just hope this strategy will make you money, we’re certain it will. The mathematical model behind this binary options trading strategy has a proven market edge.
The only tool you need to trade binary options successfully is the RSI indicator.
Even the RSI indicator is not good enough if it doesn’t have the “right” settings. The RSI default settings need a little bit of adjustment if you want to master the 1 minute time frame. We use a 3-period RSI to trade binary options profitably.
Naturally, a lower RSI period means that the indicator will tend to be noisier than normal. But it is more responsive to the immediate price action. Along with the RSI settings adjustments, we also played around with the overbought and oversold readings. We found out that by using an 80 RSI reading for overbought and 20 RSI reading for oversold condition, we get more accurate day trading signals.
*Note: Make sure you adjust the RSI settings before you jump into the binary options trading strategy.
By changing the RSI overbought and oversold line, we have eliminated the noise. So now we’re ready to highlight our binary options step-by-step guide:
Step #1: Find an instrument that is showing a low the last 50 candlesticks. Use the 60-second chart (1 Minute TF)
The 1-minute binary options or the 60-seconds time frame is the best chart for trading binary options. In other words, the best binary options expiration time is the 60 seconds time frame.
We recommend highlighting the starting point on your charts. And the ending point of your 50-candle low that you have identified. Simply draw two vertical lines on your chart through the starting point and ending point of your 50 candle low.
When you count the 50 candle low, you should always start from the current candle. Then go from the right side of your chart to the left side of your chart. If you manage to count 50 candle low, obviously the starting candle point will be your 50 candle low.
Moving forward, it’s time to put the RSI indicator in use and spot if we have extreme oversold reading or not.
Step #2: At the moment the 50 candle low develops, we need an RSI reading of 20 or below
Since this is a reversal trading strategy we need the RSI indicator to show a bullish reversal signal. An RSI reading below 20 shows that the market is in oversold territory and it can potentially reverse.
In our example below, the 1-minute EUR/USD chart is satisfying the two conditions.
Keep in mind that in order to move to the next step, we need the 50 candle low. We also need an RSI reading below 20 to happen at the same time.
We added one more factor of confluence that needs to be satisfied. If used in conjunction with the previous two conditions, it will make you a money maker binary options trader.
Step #3: Look for a bullish divergence to develop between the RSI indicator and the price.
When trading reversals, you need to be as precise as possible. The more confluence factors you have in your favor the more accurate the reversal signal is.
What we need to see here is for the price to continue moving lower after the 50 candle low was identified. At the same time, we need the RSI indicator to move higher in the opposite direction.
If the price moves in one direction and the momentum indicator moves in the opposite direction, it means they are diverging from each other. This signals a potential reversal signal.
Now it’s time to highlight how to find the right entry point for the binary options trading strategy.
Step #4: Buy a Call Option after the first candle that closes above the high of the 50 candle low
The first thing you need to do is to mark on your chart the high of the 50 candles low with a horizontal line. The first candlestick formation that breaks above this high is your trade entry signal to buy a 60-second Call option.
It’s that simple!
After you decide the amount to invest and pick the 60-seconds as your expiration time, it’s time to sit back and wait 1 minute before hopefully collecting your profits.
Step #5: You collect your profits if the next candle closes higher than your trigger candle
If at the expiration time, the price is higher than the price you opened your Call binary options, you’re lucky because you’re about to check-in a big payout.
For example, if you’ve invested $1,000 and your binary options broker offers you an 85% payout, it means that you accurately predicted the outcome of a trade. You get back your initial investment of $1,000 plus the 85% payout which in our case is $850 in profits.
If you want to buy Put binary options, use the same binary options guide, but in reverse.
Conclusion – Binary Options Trading Strategy
Before learning how to make money trading binary options you need a great Binary Options broker. You can’t start hitting home runs right out the gate without making sure you have a binary options broker who wants you to succeed. Secondly, you need a strategy based trading technique to reveal the market direction. You only need to forecast if the price will be up or down during the next 60 seconds, making it very convenient.
We use a heuristic approach to speculate on which way the price is going to move during the next 60 seconds. At the end of the day, traders are looking for a reliable binary options system that will help them make money from trading.
The good news is that the best binary options strategy is exactly that system. Our team is built of many traders with experience in the industry, including binary options traders who know how to make winning trades. We’re ready to help you with every step of the way.
Thank you for reading!
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Don’t forget to read our guide on regular options trading for beginners here.
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Trading Guide: Breakout Trading with Binary Options
Trading breakouts is not as straightforward as the name implies. Unlike trend following where the only direction that traders need
Trading breakouts is not as straightforward as the name implies. Unlike trend following where the only direction that traders need to concentrate on is where the trend is going, breakouts can be traded in both directions.
When markets break out of a trading range it means that the market is transitioning from a state of a relative equilibrium into a state where one side starts dominating the other. Sounds simple and elegant enough. This however is only part of the real picture, because these breakouts can be “breaking” anything from trend lines to previous candles. The term breakout simply means that the market is moving above or below a certain high or low.
Trading binary options when the market is breaking out is not as straightforward as it may seem though. Rarely do we see breakout candles close exactly on the breaking out price, and since the best signals are those after the candles close, trading breakouts can be a bit tricky.
Price breaks the support line but stays above it for nearly an hour.
The markets like to keep their inertia. This means that the same force that makes the trend just keep on going, will keep the range from breaking out. In fact, trading breakouts in the direction of the breakout can often be a losing strategy. Looking at an example of a 15 minute EUR/USD chart shows how trading the breakout before the candle closes and in the direction of the breakout is a losing bet. Timing is of great importance when trading, especially in binary options.
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Example of price breaking out and reversing.
Actually, when the market is trading in a range and it is nearing its bottom, it is often better to trade in the opposite direction. Keeping in mind of course we wait for the candles to close so that we can determine how strong the breakout is or how weak and likely to fail it is.
If we look at breakouts that happen in different circumstances, for example in a bull or upward trend, then buying a call option, which is a trade with the upward trend, is a strong position to take.
Trading breakouts in the direction of a strong trend and with strong candles
Generally speaking however, the term “breakout” is misleading because most of the breakouts fail to really break and the market remains in the range it was supposed to get out of. So in fact, buying puts or calls depends on the type of breakout, the direction of the trend, whether it’s in a range and also on the signal that is telling you to act.
Breakouts are just one part in the spectrum of trading, but they are crucial at the same time since they represent the beginning of trends, and this is the only way that traders actually make a profit, since it is the difference between prices that makes them profitable or not.Best Binary Options Brokers 2020:
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