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Стратегии в бинарных опционах
Для получения прибыли бинарными опционами на регулярной основе необходимо придерживаться определённых стратегий для торговли опционами. Одни стратегии достаточно простые для новичков, другие же больше подходят для опытных трейдеров. Появление торговых стратегий обусловлено многократным анализом поведенческих моделей рынка, а также основных особенностей бинарных опционов. Благодаря правильному подходу значительно снижаются степени рисков и многократно увеличиваются шансы инвесторов на привлечение прибыли. Вот краткий список популярных стратегий, которые чаще всего применяются на нашей платформе:
Стратегия хеджирования, которую назвали Коллар, прекрасно подходит для торговли бинарными опционами. Она также иногда называется усредняющей стратегией для убытков и прибыли. Эта стратегия применяется при торговле бинарными опционами типа one touch или одно касание. Стратегия хеджирования значительно снижает риски, которые возможны при покупке одновременно опционов High/Low. Суть данной стратегии заключается в факте, при торговле появляется возможность покрывать премиальные на один опцион в результате продажи другого опциона. Существует возможность обнулить закрытие сделок, что дает возможность не получить убытки при неправильном выборе опциона. То есть, трейдер в результате не получает ни прибыли, ни убытков. Такой результат называется бесплатным Колларом.
При торговле бинарными опционами часто используется стратегия Стрэнгл. Название звучит в переводе с английского языка, как давить, душить. Благодаря данной стратегии трейдер может получить возможность использовать одновременно опционы одному активу. При определенном развитии событий одновременное приобретение этих опционов с разными страйками может принести ощутимую прибыль.
Если приобретение опционов при стратегии стрэнгл выполняется по различным ценам исполнения, то стратегия стрэддл предусматривает приобретение опционов по одинаковой цене исполнения. Отличаются стратегии стрэнгл и стрэддл ценой. Так цена одного стрэддла равняется цене нескольких стрэнглов. Естественно, использование стрэнгла обойдется в несколько раз дешевле использования стрэддла. Конечно, прибыль также будет более ощутимой от использования стрэддла, ведь доход от продажи стрэнгла расположен в более суженном коридоре.
Реверсивные, или разворотные стратегии несут в себе несколько более прибыльный характер и основаны на отклонениях базовых активов от своих нормальных показателей и последующий возврат к нормальным показателям. Трейдеры же в свою очередь покупают «high» или «low» опционы, предугадывая их возврат к нормальному положению. Данный метод требует некоторой подготовки и знаний нормальных показателей активов.
Еще одна популярная среди начинающих пользователей стратегия – это по «Мартингейлу». Она являет собой удвоение покупок опционов после неудачной сделки. С каждым следующим удвоением ставки шанс на прибыльный опцион увеличивается в два раза.
Where the breakout strategy required you to identify levels of support and resistance and then wait for a breakout point, the support/resistance strategy will require you to identify them and then utilize pattern within the levels. How can you do that? Read on and find out..
Что такое стратегия поддержки/сопротивления?
The support/resistance is a short-term strategy that helps you utilize the levels of support and resistance to your advantage. How is this possible? It’s pretty simple, really. Once the price tests the support/resistance, it tends to go in the opposite direction. This is where you enter the trade – right after the price has tested the levels. Of course, this doesn’t guarantee anything, but it leaves you with a nice chance of winning.
60-second binaries are fast-paced trades so you need to be quick about it and not let yourself fall in a pattern of just waiting and looking at the charts because you might miss the moment and enter the trade in a wrong time, when the price is ready to reverse directions again. You need to be really quick in order to utilize this strategy in order to improve your chances of winning. Speed isn’t everything, though. It’s also important to study the charts and establish previous patterns before you decide to enter a trade. The more information you have, the more likely you are to be successful.
Что нужно знать для того, чтобы стратегия работала?
The required skill set here is pretty much the same as the one required by the breakout strategy. You need to know at least basic technical analysis. You will have to read charts, so you need to be familiar with the type of chart your broker is using. The most popular today are the candlestick and bar charts and they are the ones you should utilize because they show you lots of information and make it easy to establish a support and resistance level. Of course, you also need to know what support and resistance are and how to establish them.
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When the price can’t go below a certain level, we call that a support level. In order to establish support, the price has to consistently be unable to breach that level. In the case of support, it’s the same, but the price can’t above a certain value. Once more, this phenomenon has to be observed several times in order to establish it.
The best thing about this strategy is that it gives you a great chance of success if you’re quick enough. Usually when the price tests the level of support/resistance (which means reaching it without breaking it), it goes in the opposite direction, which is when you should enter the trade. You need to be quick, though. Enter too early and you may hit it right when it tests the level, which means that it will be at its highest/lowest and you will lose (unless you’ve made the right call, which is not likely if you screwed up your timing). Enter too late and you may hit the reversal when the price had changed direction, gone up or down, and now is reversing it again.
It’s important to note that levels of support/resistance are established when there are relatively small price movements. The price will move between the support/resistance levels and these movements can be quite fast, albeit insignificant in the long scheme (because there is little trading of the underlying asset, the price is stable in the long run which means that these fluctuations aren’t relevant for long-term investors).
What this means is that you need to be precise and make quick decisions, as well as enter trades at the right time. The safest time to enter is right after the support/resistance has been tested. This is when the price is sure to be in the opposite direction at least for a little while. If its tested the support, then place a call trade because it’s likely to go up. If it’s tested the resistance, place a put because it’s likely to go down.
In order to minimize the risks, you shouldn’t trade more than 5% of your capital. All in all, there is no such thing as a “sure strategy” so you need to always be prepared for the possibility that you will lose.
Binary options trading is all about predictions. If you can make accurate enough predictions based on the information you’re presented with, then you can make a nice profit without too much of an effort.
However, predicting the price movements isn’t easy, especially on the one-minute scale you will be working with (after all, they’re called 60-second binaries for a reason) which means that you need to have a viable strategy to implement in order to improve your chances of profiting.
Never take unnecessary risks. Even though it’s true that 60-second binaries require you to be quick in your decisions, that doesn’t mean that you’re supposed to commit to bad trades. Your strategy will determine what is a good and what is a bad trade. We’ve already covered the importance of strategies and the skills you will need in order to become a good trader in another section. In this one, we will talk about the breakout strategy.
What is a breakout strategy?
In the periods of stagnation on the market, prices begin to consolidate on certain positions. These positions tend to form levels of support and resistance. When the price can’ fall below a certain level, then we call that level support. In quite the same manner, when the price can’t go above certain levels, we call that level resistance. The levels of support and resistance are pretty obvious in charts.
When the price of an asset touches the level of support or resistance but doesn’t break them, we say that the price is testing them. When the price manages to break levels of support or resistance, then we are talking about a breakout. The breakout generally needs to be confirmed in the long run because sometimes there are “fake-outs” but in general a breakout in either direction signals the forming of a new trend.
Traders who use the breakout strategy wait for a breakout to occur and enter a position early in the new trend. Once the new trend is formed, the former level of support or resistance (depending on where the price broke out) becomes the opposite of what it used to be (which we call a reversal). For example, if the price broke the resistance levels in an upward direction, then the previous resistance level becomes the support level for the new trend. If the price broke downwards, then the previous support level becomes the resistance level for the new trend.
In order to use this strategy, the trader has to carefully follow the charts and price fluctuations in order to spot the breakout. Once he see the support or resistance being broken, he is ready to enter a position. The problem with this strategy in the 60-second binaries’ real m is that it cannot be confirmed right away. Usually the confirmation that we have a breakout in normal trading comes from the price closing higher than the level of resistance or lower than the level of support. Nonetheless, the strategy can be used because we don’t really need to confirm it in the long run.
We need it to be there for the next minute. Once the price breaks in either direction, it will immediately try to return to the level before it was broken but will probably be rejected. We still need to wait for a bit to see how persevering the price is. If it doesn’t get back to the previous levels in two attempts, this is where it’s a good idea to enter the trade. If the price broke upwards, then you place a call bet and if it went downwards, you place a put bet. The fact that it didn’t get back to previous levels indicates that breakout is persistent enough. Keep in mind, though, that there is still a chance that the price returns to the original boundaries in the third attempt. This is the risk of the strategy because of its short-term nature.
A few tips
Many brokers today give you the opportunity to observe past trends in order to make up your mind of how you want to invest. There are also tons of independent tools, apps and sites online. All you have to do is find them. It would be a good idea to learn how to read candlestick chats because they’re widely used.
Money management is important. You should risk more than 5% of your capital on a single trade. Follow this rule and you will significantly cut your losses. Also, before you actually start trading your own money, try out every new strategy using the demo. This way you won’t risk your own money and in the same time you will find out how well you know the strategy, in reality.
If you want to make some money by trading 60-second binaries, then you need to employ a strategy, read charts and look for indicators before you even begin to trade. If you don’t do that, then you are basically gambling your money (and you might even have a smaller chance of winning than some gamblers considering the fact that even gamblers use strategies in games like Blackjack, Craps and Baccarat).
Strategies are in the heart of the money process of trading binaries. If you’re not familiar with charts and technical analysis, visit the “Technical Analysis” sections of our site. We have a very comprehensive guide to technical analysis, including charts, types of charts, patterns, indicators and more.
Unlike most other types of trading, though 60-second binaries require you to be extremely quick and make decisions on the stop. Often times you will have mere seconds to take action and you can’t afford to lose even a single moment. But having a good strategy, although it’s a good start, is not enough to make you a successful trader. You also need to be disciplined (what’s the point in having a good strategy if you don’t follow it) and you need to know when it’s time to back down and stop trading.
Many investors make the same mistake when they lose from a trade – they try to immediately get their money back and thus lose a lot more because their emotions are clouding their judgment. This is always bad because often time you tend to see what’s not there and lose a lot more, which increases your anxiety and the need to make a fast profit, which leads you to even more bad trades. The way to avoid this is to simply stick with your strategy.
Basic knowledge you will need in order to form or follow a strategy
Many traders refer to 60-second binaries as gambling. They would be right if a good trader wasn’t working with so much information, processing data and making good money out of his trades. 60-second binaries are only gambling if you gamble your money away counting on luck. If you’re methodical, know the market and and are good at technical analysis, then you will never have to gamble in any way, shape or form. Of course, there is no such thing as a 100% good strategy. There is no magical formula that will give you 100% success rate from your trades and make you millionaire in a few hours. However, there are strategies that increase your chances of winning, especially if you can find the right indicators.
In order to trade well, you need to know the market. You also need to have the ability to spot trends in their genesis and see indicators when they are there. You won’t have any time to lose so you need to be able to do all of this in your sleep. You will have to work with lots of charts, so learn how to read them. We have very comprehensive guides on our site so go look them up if all of this seems like a collection of random words to you. If someone told you trading binaries was going to be a walk in the park, then someone lied. You will have to work for it.
Develop Analytic Skills
You will have to be analytical and have a great attention to detail and you have to learn to accept failure, because no matter how good you are, some of your decisions will lead to losses. You need to have a responsible money management so that you can ensure that the losses don’t mitigate the profits. Trading binaries is a demanding job. Yes, it gives you lots of freedom, but it requires lots of work, as well.
There is one more thing you need to keep in mind. No matter how good a strategy you have, you need to learn to adapt. The fact that a strategy is good in a certain market doesn’t mean that it will be good in every market. You need to analyze, adapt and trade carefully. This is the only way to become a successful trader in the highly competitive world of 60-second binaries.
How can you trade 60-second binary options? It’s actually much easier than you might think. Making a profit is the tricky part (we’ll touch upon that subject in the “Trading Strategies” section) but trading, in itself is pretty simple. You will only have to find the capital to start and find a broker that offers 60-second binary options trading. That’s it, really. That’s how you trade 60-second binaries. However, how do you trade 60-second binaries correctly? This is a much better question, and one we will attempt to answer.
How do you trade 60-second binaries properly?
To many more or less inexperienced traders, 60-second binaries may seem more like a gamble than anything else. However, if you have a bit of an experience in the field, you know how to read charts and spot trends, then you will definitely know that it’s not as much of a gamble as it is a calculated risk. The thing about 60-second binaries is that they are traded really quickly, so you need to be able to quickly think on your feet. You need to be able to make quick decisions and you will also need to have quick fingers in order to place the trades fast.
Since 60-second binaries trade so quickly, you need to have clear strategy if you hope to make a profit. You also need to be really disciplined with your trades. Don’t let the small investments you make fool you – you can lose a lot of money in a few hours if you’re not careful. The correct way to trade is to not try to rush things. Yes, 60-second binaries require speed. However, if you rush to enter every trade, even if that trade doesn’t bear the potential to be beneficial for you, then you will suffer significant losses even if you make small investments.
The proper way to enter a trade is when you know you have a high chance of the trade being successful. If there have been two up-movements in the last two minutes, then it’s not that far fetched that an uptrend is forming, and if you place a call trade, you might win. Same goes for two down-movements. But in order to know that, you need to use the proper software.
There are many free applications and sites that offer you all the data you will need to make a decision, but you need to utilize the opportunities. Of course, you can trade like some people do it – just go in the site and start betting your money, like gambling. However, you will lose more than you win this way, which isn’t really the idea, is it? The proper way to trade binaries is not to turn it into a game. It’s to remember that this is a source of income and a job, and you should treat it like that. You can’t afford to start throwing money at the broker in the hopes that you might get something right. You need to have a strategy and you need to follow the data. This is how you trade properly.
Some advice when it comes to binary options
Many claim that they’ve discovered the “holy grail” of binary options trading – that one strategy that gives you 95% success rate and will make you rich in the matter of hours. Of course, you will have to pay in order to get it, but what are a few hundred dollars compared to the thousands you will make in the next few hours, and hundreds of thousands you will get in the next few days? Nothing, right? Wrong! When something seems too good to be true, it probably is.
Don’t believe such bogus strategies and methods – there is no magic formula that will ensure that you win 95% of the time. There is no magic formula that will make you rich. Sure, you can make money from binary options, but the truth is that it will require a lot of time, effort and attention. You will suffer losses along the way, you will be on the verge of giving up, and you will meet ups and downs. The point is that you should always be careful when someone offers you “the best strategy”.
Also, choosing your dealer carefully matters a lot. Some dealers offer bigger payouts than others. Some offer better customer support and some offer you all in one. Choose your broker carefully – this can be the difference between making a lot of money and being frustrated with constant losses and software problems. If you want to trade properly, you have to work for it. There is no other way. The good news, though, is that it’s absolutely worth it.
In this article we discuss the aggressive style of binary options trading. How aggressive are you? In the end, after all we’ve talked about, it all boils down to this – how aggressive are you? And more importantly – how aggressive when it comes to trading binary options can you afford to be? In every movie about Wall Street or any type of trading in general, the character people most look up to is the cocky, confident (sometimes even arrogant) trader who always knows what he’s doing and isn’t afraid to take big risks because the high rewards they bring. In reality, though, things are a bit different. Being that aggressive trader if you don’t have the capital and the nerves of steel to back up that style of trading can ruin you.
It can not only bring about your financial ruin, but it can also take a toll on your health and even deal irreparable emotional damage. It may sound far-fetched, but is it really? Think about every small loss you’ve had to endure and now multiply that feeling by a thousand. Just imagine that you’ve just lost your entire capital on a single deal. How do you feel? Doesn’t seem so far-fetched now, does it?
Still, aggressive trading is sometimes acceptable, but only when certain conditions are met. First, in order to trade aggressively, you have to be cut out for it. Emotions can’t play any role in your trading. You need to be able to handle eventual losses well. You will need nerves of steel because the risk is high. Not everyone can handle considerable losses so you should ask yourself how would you react if you lost most of, if not your entire capital.
Can you handle it? If you can’t, then better stick to safer trading styles. Also, this type of trading is usually suited for younger traders. It’s much easier to bounce back, take risks and basically be reckless with your money if you don’t have a family to feed. Having an additional source of income is a huge plus. If you don’t have additional income, then you must make sure that your portfolio is diverse enough to handle the losses.
This is just the beginning. Aggressive binary trading requires much more management, so you need to make sure that you have the time for it, and that you’re ready to dedicate yourself to the trades. You will have to constantly follow the market and make adjustments to your strategy in order to stay in the game. It’s undeniably much more stimulating than safer trading styles. You will have to constantly keep your head in the game and absorb all that information in order to make the right decisions – it’s thrilling. However, as we said, it’s not for everybody.
We feel we’ve issued enough warnings. If you can’t handle the pressure, don’t go trade aggressively. Now let’s take a look at the good side of aggressive trading. Sure, it’s much riskier and requires a lot more work, but it’s much more beneficial if you manage to do everything correctly and the market is on your side.
The thing with high-risk, high-reward styles is that the rewards are high if the conditions are right and Lady Luck smiles upon you. The truth is that no one can say for certain what’s going to happen, so strictly speaking you may end up being safer by employing an aggressive strategy, simply because your profits will make up for your losses, and then some.
However, the problem is that if the environment is against you, then you will be left with significant losses and no way to compensate. It’s a thrilling game. There are some trades that are enough to get your blood pumping as much as bungee jumping. If you’re a thrill-seeker, then this type of trading is just for you. However, there is one important thing to remember – never be irresponsible with your money. You can’t afford to lose everything.
The difference between a good trader and a bad (well, one of the many differences) is that the good options trader always has a safety net whereas the bad trader goes “all in” counting on a bit of luck and nothing more. And when his luck runs out, then he is simply no longer a trader because he doesn’t have anything left to trade with. It’s a gruesome truth, but one you need to accept if you don’t want to end up like this. Always have a contingency!
We’ve already established the differences between fundamental and technical analysis in the previous section. Now it’s time to talk in more detail about technical analysis and one of its defining characteristics – the search and identification of trends.
Trends are one of the most crucial analytical units in technical analysis. Spotting them is one of the main objectives of the process, hence their huge importance is simply undeniable. Even so, the idea is not all that difficult to explain. Trends in finances are not all that different from trends in the general sense of the word. What it really means is the overall direction where something (in this case the market) is headed. You can clearly see the trend in the following example:
However, keep in mind that it’s not always as easy to spot a trend as you might be led to believe. That’s why a proper skill set and lots of training is needed before you will be competent enough to identify a trend in normal circumstances. Here’s another example of a trend in a more natural environment. As you can see, you can’t tell it right away.
Some charts offer you lots of information about the security, but hardly where it’s headed. Additional training and research are needed before one is able to spot trends by simply looking at a chart. Sometimes, additional information about the market environment as well as the characteristics of the asset are also need if you hope to identify a trend.
A More Formal Definition
You already know that spotting a trend isn’t as easy as it may look at the first glance. By looking at a chart, you will notice that the numerical values of the price of an asset never go in only one direction and always have some sort of fluctuations. This means that we can’t identify a trend on the sheer price movements in a direction; instead, we look the series of highs and lows the prices go through during their movement and this is how we determine a trend in the financial sense of the word.
give you an example, an uptrend would represent higher highs and higher lows in a series of numerical progressions and will tell us that there is an overall rise in the price of the asset. If it keeps the same direction, then we have a trend. The situation with the downtrend is the polar opposite – we get lower highs
As you can see in the example, we have a progressive series of highs and lows and it’s clear that the overall price of the asset is going up. The trend keeps up as long as each low is higher than the one before. If the successive low is lower than the one that preceded it, then we are talking about trend reversal.
Types of Trends
The types of trends we know are three. You already know about uptrend and downtrend. In the uptrend, each successive low is higher than the one before it, which means we are talking about an overall upward direction of movement, hence the name. In the downtrend, each successive high is lower than the one before it, which means that the overall direction is downward. There is a third type of trend we haven’t talked about yet, and that is the sideways trend (also known as horizontal trend). There has been some dispute as to the validity and existence of such trends at all.
While some traders consider them an important part of the decision making process, others think that there should be no existing definition for those trends because they are more technically a lack of trend. Unlike the uptrend and downtrend, the horizontal trend offers little to no movement (which is why some traders don’t consider it a trend). It’s a moment of stability. Whether you think it’s a trend or the lack of thereof, it’s important to acknowledge when the market reaches an episode of stagnation.
The Importance of Trends
Identifying and using trends to a trader’s advantage is one of the most important aspects of trading. Even though it may sometimes be complicated, the process of spotting and properly trading based on a trend is in the heart of the successful business transaction. Technical analysis relies heavily on the analyst’s ability to perform those duties well and even though it may not seem like it sometimes, if you manage to identify a trend and use it, you can make a lot of money (even though there are still risks).
Here you can learn how to use how to use fundamental and technical analysis in order to trade binary options. There are two main types of analysis concerning the financial markets – fundamental analysis and technical analysis.We’ve touched on the subject of the difference between the two – technical analysis goes after empirical data and studies price fluctuations in an attempt to spot trends and predict future movements, whereas fundamental analysis observes economic factors and tries to determine value based on those factors. However, let’s look at more details and compare the two schools of thought more thoroughly.
Charts vs. Financial Statement
At the lowest level, the difference between the two types of analysts is that a fundamental analyst would start with a financial statement, whereas a technical analyst would always go for the charts. The fundamental analyst endeavors to compute an approximate value for a company based on different sources of information, such as cash flow statements, balance sheets, financial statements and more. By determining the intrinsic value of the company using this approach, it’s fairly easy to make financial decisions. If the stocks are sold at a price lower than the intrinsic value, then it’s a good investment and if the stocks are sold at a higher price – it’s a bad investment.
(Note that this is an oversimplification for educational purposes only. In reality, the methods involved in determining values and basing your entire investment strategy on those findings is way more complicated. You can spend days reading about it and barely scratch the surface.)
As far as technical analysts are concerned, though, most of the actions related to calculating the intrinsic value of the company are a waste of time. As far as they are concerned, the only thing that matters is the stock price. They are only interested in empirical data and consider that all the information they would need about the stocks can be found in the charts. Technical analysts don’t concern themselves with value – for them, money talks. By looking a chart, they expect that the past price movements can indicate different trends and can predict future price movements.
Another big difference between the two types of analysis is the time frame. Where fundamental can involve the processing of data over a number of years, whereas technical analysis can work with information in the range of a few minutes. This obviously means that fundamental analysis has a long-term nature, whereas technical analysis can be used in the short-term.
There are a few reasons for this difference. The most significant one is that fundamental analysis focuses on the long-term because of the investment style it complies with. The trades and investments based on the intrinsic values of a company are not reflected on the market immediately. This means that even if there are some changes, they aren’t as fast and dynamic as price fluctuations, for example. Hence, fundamental analysis isn’t bound by those short-term changes. This sort of investing is called “value investing”. It’s a long-term investment method entirely based on the premise that short-term investing is wrong.
There is another factor making it impossible for fundamental analysis to be conducted in a short-term window. The information and different statements fundamental analysis works with isn’t released frequently at all. For example, financial statements are released quarterly. Now, compare that the price differences of the stocks that can be observed all the time and you can easily see why the difference in time frame is there. Where technical analysts can work with stock data generated all the time, fundamental analysts work with information released at much bigger intervals.
Trading vs. Investing
Another big difference between the two types of analysis is the objective. Technical analysis is based on short-term empirical data and is mainly utilized in trading. Fundamental analysis aims at assisting in the investment department at a much grander, long-term scale. The aim of a trader is to purchase an asset in order to later re-sell it a greater price, thus making a profit from the difference. This is short-term process. On the other hand, an investor looks for assets he believes will rise in value as time progresses, and makes the purchases based on that premise, fully aware that this process may take a long time and has long-term consequences. It may sometimes be difficult to understand what the difference between trade and investment is (the line between the two is rather thin) but this is one of the main aspects differentiating between fundamental and technical analysis.
Now that you have a better understanding of the difference between these two types of analysis, in subsequent sections we will focus more on the introduction of technical analysis.
Price is an essential point in trading, which is why we’ve mainly focused on its mechanics up until this point. However, trading binary options has other important aspects and volume is one of them.
What is Volume?
The concept of volume is a rather simple one. Volume is the amount of shares or contracts traded within a set time perimeter (a day, in most cases). The higher the amount, the higher the volume, and hence of activity of the security. Changes in volume can easily determined or viewed as in most there are volume bars located around the chart. By observing shifts in a security’s volume, we can spot emerging trends, just like we can use prices for the same purpose.
How Important is Volume?
It is possible to use volume as a confirmation mechanism for trends and chart patterns, automatically making it one of the most important aspects of technical analysis. If we observe a price alteration with a high volume level, it would be considered more relevant than the same price alteration but with low volume. In the first case it’s much more probable that we are talking about a trend reversal, while in the second case it might be a simple temporary fluctuation which is irrelevant to long-term trading.
Let’s set an example in order to visualize this more easily. Imagine that a company’s stocks rise in value with 5% in one trading day after a long-term drop. We have the price aspect, but it cannot tell us if we’re looking a trend reversal or a random fluctuation at the given time. For a more relevant conclusion, we should look at the volume of the asset for the same day. If the volume is higher than average, then this might very well mean that we are looking at a trend reversal (remember that technical analysis isn’t an exact science, which means that this is not conclusive; it’s telling us what we might be looking at but we are still working with possibilities). However, if the volume is lower, then it’s probably not a trend reversal at all.
Volume should generally go the same direction as the trend. If prices are rising, then so should the volume, and vice versa. Volume can also be used to determine a trend’s stability. In the cases where the two values correspond and have the same direction, then we are talking about a stable trend. However, if the price and volume start moving in different direction, this may be a sign that we are talking about a weakening in the trend.
In the cases when price and volume tell different stories, we are talking about a divergence. This is a phenomenon described as a discrepancy between two different indices (in this case price and volume).
Volume and Chart Patterns
Volume can also be used to confirm chart patterns. We will describe the confirmation process in more detail once we talk about the different patterns, such as head and shoulders, triangles and flags. Volume is the aspect that helps us determine the accuracy and strength of a pattern.
Volume can also give us a basic idea about the future price movements of an asset. If the volume is decreasing, then the price will probably decrease, as well, even if there is an uptrend at the current moment. This is a very important point for various reasons, the most important one being that it can actually help us with price predictions and can give us the idea of when it’s the right time to buy and the right time to sell.
This is an overall important aspect of technical analysis and will help us in our further studies of the this splendid activity called trading. The better your understanding of the basic concepts is, the better you will be able to grasp the overall concept, the ideas that tie the whole venture together, the immense opportunities related to trading. In the end, all of this is crucial for your understanding of the market and the modern economic mechanics. Now that we’ve covered some of the basics, it’s time to move on to something a bit more complicated – charts.
Here you will learn the basics of money management and position sizing in binary options trading. Managing one’s money money is an important step towards developing a steady and long lasting flow of capital; especially when the transactions happen so loose and fast and it is quite possible to make a financial mistake while your at it.
Position sizing refers to dealing with your how much of your total account you risk with each individual binary trade. If you are not careful and spend too much money (and the market statistics go very differently from what you had predicted), there is a big possibility of a partial, if not complete bankruptcy for the trader.
But like the saying goes “You have to spend money to make money”. And this cannot be more true for binary trading, for if one doesn’t take the initiative and risk some capital, how can he then expect a big return? In the case of Forex trading, market shares etc. it is very difficult to keep an exact lock on your purse, seeing as the exact value of your stock is not predetermined as it is with trading binary options.Before we can begin trading, we must inset some funds into our account. Some brokers would allow a deposit as low as €100 euro, although from a purely practical reason, we suggest investing no less than €500, if just to make any potential profits seem more noticeable. Should one go a head and decided to deposit additional funds one they get acquainted with the mechanics behind these sorts of transaction, this is perfectly acceptable and even recommended for traders who are just stepping foot into the world of trading.
A very good idea is to split your funds between multiple brokers (2-3 at the same time). There is a good reason behind this, most important of which is that a broker can go out of business at any given moment; making the idea of investing all your capital in one place seem like an unnecessarily risky gamble.
Another reason is that different brokers each have their own set of rules, payouts, underlying asset options etc. And although some traits can be beneficial for the investor, others however might prove to be a weakness. So knowing all about the conditions by which your money is traded is very important for a successful chain of predictions should you choose to implement strategy.
So regarding proper position sizing, we would strongly recommend to divide the total of your capital into convenient portions (percentages), and invest each one to a corresponding binary option. For the purposes of explaining this concept, we will invest €500 between two unrelated/competing brokers.
If we decide to buy 5 binary options from each broker at a rate of 10% of the total per purchase, that would make a €50 dollar investment a piece. Beginners are not advised to go above the 10% mark, unless they wish to risk the majority of their capital. Only after a trader has gotten the feel for trading with binary options, should he increase the percentage or better yet, just add more funds. Of course everything must be calibrated and tuned to the utmost precision; like the optimum risk amount, risk of ruin and computing the Kelly Value.
A Few Steps to Profitable Trading
Step #1. Never rely on any super natural premonitions, including hunches, lucky clovers, coin tosses, mediums, fortune tellers, lucky guesses, talking guts, a sign in the clouds or anything else that doesn’t have any basis in reality. Find a strategy that would suit your particular taste and go with it until you figure out something better.
Step #2. Determine what kind of bet you are interested in (and hoping would turn out to be the most accurately predictable). As we recall, those can include the simple Call/Put method, or one of the four ‘touches’, as well as the time span they are traded in.
Step #3. Like with many things in life, choosing the initial conditions will determine the layout on which the play is developed. In this situation, choosing a competent and ‘seemingly stable’ set of brokers is the key to a secure investment.
Step #4. Never allow yourself to step over the boundary of what is considered a reasonable expense at the particular station. Getting carried away with your funds due to poor money management is probably the biggest mistake most beginner binary option traders make (and they reason they fail, obviously). Keep a close eye at all your expenses, be mindful and write everything down as you go along. You will need to draw some sort of statistic from your transactions later on.
The FTSE, getting its name from noticeable British companies totaling 100, are all situated inside the London Stock Exchange. Inside the marketplace there is a broad scope of enterprises that makes up this index. Both the London Times and the Financial Times have come to hold the FTSE together. The essential features that determine the cost of the index have the binary options strategy structured on its capacity.
Earning Reports for United Kingdom
The United Kingdom’s specific trading companion is the Euro Zone. Anything that occurs throughout this sector can easily influence indicators among the UK, regardless of the fact they refused to be a part of the Euro Zone. The FTSE is certainly included here and this association between them can aim the binary options investors in the position of various essentially lucrative possibilities. For the duration of your trading occupation continue to be attentive to this secure relationship.
Examine the FTSE 100 Index
You will need to provide yourself with critical and specialized evaluation in order to exchange or trade for earnings in the FTSE 100. Several practical tools are provided to binary options traders such as market news, charts, graphs and even more. You will find out that most of the brokers can offer you simple tools to use but there are even more you can find online. For example, there may be planning packages that can be modified according to your specific functions on binary options trading. You may have to sign up for a free account to get some of these, but they are free!
How to Trade with FTSE 100
When it comes to trading, it should not be difficult for binary options traders to detect any pertinent information. Brokers will be able to show you present values and historic prices and so can use sources such as Reuters and Bloomberg. The first step you should make is creating a strategy on account of the insight to where current prices have changed compared to prior times.
Put and Call trades are the easiest trading methods for binary options. The trader will know whether or not if the put and call options are a better choice to follow but everything will depend on the asset price data. Traders should be able to correctly develop and come up with highly precise forecasts unless the asset prices are too inconsistent.
A function known as trade customization is an Option Builder, which a binary options broker can supply you with. This handy component will assist you in making very distinct decisions in relation to investment amounts, expiration time, etc. One should always to pay attention to trading times to see if they correspond to London market hours. If you are the one to follow financial reports then you should make sure you synchronize your work schedule with the one of the UK business hours.
History price data, which is found in earning reports, are only published four times per year for those, who are into establishing trades upon them. You should be be watchful for purchases, mergers, and other vital key ideas associated to businesses related to your trades. The index price will pretty much go up or down based upon multiple change standards.
If you are going to trade through the FTSE 100, then you should realize that this market is not as changeable as the American or Asian ones. Bearing this fact in mind, you will be sure to notice that a less versatile market can be described with better reliability. Although there is no guarantee that you will make a profit, you should definitely make sure you have studied carefully the specific features of the market.
Это лишь несколько основных методик, по которым работают с бинарными опционами, а ведь из незатронутых еще есть много визуальных графических, по подсчетам, сезонных, а также многих других методов заработка денег опционами.
How to Succeed with Binary Options Trading 2020
Welcome to the largest expert guide to binary options and binary trading online. BinaryOptions.net has educated traders globally since 2020 and all our articles are written by professionals who make a living in the finance industry and online trading. We have close to a thousand articles and reviews to guide you to be a more profitable trader in 2020 no matter what your current experience level is. If you wish to discuss trading or brokers with other traders, we also have the world’s largest forum with over 20 000 members and lots of daily activity. Read on to get started trading today!
Top Brokers in Russia
What is a Binary Option and How Do You Make Money?
A binary option is a fast and extremely simple financial instrument which allows investors to speculate on whether the price of an asset will go up or down in the future, for example the stock price of Google, the price of Bitcoin, the USD/GBP exchange rate, or the price of gold. The time span can be as little as 60 seconds, making it possible to trade hundreds of times per day across any global market.
Before you place a trade you know exactly how much you stand to gain if your prediction is correct, usually 70-95% – if you invest $100 you will receive a credit of $170 – $195 on a successful trade. This makes risk management and trading decisions much more simple. The outcome is always a Yes or No answer – you either win it all or you lose it all – hence it being a “binary” option. The risk and reward is known in advance and this structured payoff is one of the attractions.
Exchange traded binaries are also now available, meaning traders are not trading against the broker.
To get started trading you first need a regulated broker account (or licensed). Pick one from the recommended brokers list, where only brokers that have shown themselves to be trustworthy are included. The top broker has been selected as the best choice for most traders.
If you are completely new to binary options you can open a demo account with most brokers, to try out their platform and see what it’s like to trade before you deposit real money.
Introduction Video – How to Trade Binary Options
These videos will introduce you to the concept of binary options and how trading works. If you want to know even more details, please read this whole page and follow the links to all the more in-depth articles. Binary trading does not have to be complicated, but as with any topic you can educate yourself to be an expert and perfect your skills.
The most common type of binary option is the simple “Up/Down” trade. There are however, different types of option. The one common factor, is that the outcome will have a “binary” result (Yes or No). Here are some of the types available:
- Up/Down or High/Low – The basic and most common binary option. Will a price finish higher or lower than the current price a the time of expiry.
- In/Out, Range or Boundary – This option sets a “high” figure and “low” figure. Traders predict whether the price will finish within, or outside, of these levels (or ‘boundaries’).
- Touch/No Touch – These have set levels, higher or lower than the current price. The trader has to predict whether the actual price will ‘touch’ those levels at any point between the time of the trade an expiry.
Note with a touch option, that the trade can close before the expiry time – if the price level is touched before the option expires, then the “Touch” option will payout immediately, regardless of whether the price moves away from the touch level afterwards.
- Ladder – These options behave like a normal Up/Down trade, but rather than using the current strike price, the ladder will have preset price levels (‘laddered’ progressively up or down).These can often be some way from the current strike price.As these options generally need a significant price move, payouts will often go beyond 100% – but both sides of the trade may not be available.
How to Trade – Step by Step Guide
Below is a step by step guide to placing a binary trade:
- Choose a broker – Use our broker reviews and comparison tools to find the best binary trading site for you.
- Select the asset or market to trade – Assets lists are huge, and cover Commodities, Stocks, Cryptocurrency, Forex or Indices. The price of oil, or the Apple stock price, for example.
- Select the expiry time – Options can expire anywhere between 30 seconds up to a year.
- Set the size of the trade – Remember 100% of the investment is at risk so consider the trade amount carefully.
- Click Call / Put or Buy / Sell – Will the asset value rise or fall? Some broker label buttons differently.
- Check and confirm the trade – Many brokers give traders a chance to ensure the details are correct before confirming the trade.
Choose a Broker
Options fraud has been a significant problem in the past. Fraudulent and unlicensed operators exploited binary options as a new exotic derivative. These firms are thankfully disappearing as regulators have finally begun to act, but traders still need to look for regulated brokers.
Note! Don’t EVER trade with a broker or use a service that’s on our blacklist and scams page, stick with the ones we recommend here on the site. Here are some shortcuts to pages that can help you determine which broker is right for you:
- Compare all brokers – if you want to compare the features and offers of all recommended brokers.
- Bonuses and Offers – if you want to make sure you get extra money to trade with, or other promotions and offers.
- Low minimum deposit brokers – if you want to trade for real without having to deposit large sums of money.
- Demo Accounts – if you want to try a trading platform “for real” without depositing money at all.
- Halal Brokers – if you are one of the growing number of Muslim traders.
The number and diversity of assets you can trade varies from broker to broker. Most brokers provide options on popular assets such as major forex pairs including the EUR/USD, USD/JPY and GBP/USD, as well as major stock indices such as the FTSE, S&P 500 or Dow Jones Industrial. Commodities including gold, silver, oil are also generally offered.
Individual stocks and equities are also tradable through many binary brokers. Not every stock will be available though, but generally you can choose from about 25 to 100 popular stocks, such as Google and Apple. These lists are growing all the time as demand dictates.
The asset lists are always listed clearly on every trading platform, and most brokers make their full asset lists available on their website. This information is also available within our reviews, including currency pairs.
The expiry time is the point at which a trade is closed and settled. The only exception is where a ‘Touch’ option has hit a preset level prior to expiry. The expiry for any given trade can range from 30 seconds, up to a year. While binaries initially started with very short expiries, demand has ensured there is now a broad range of expiry times available. Some brokers even give traders the flexibility to set their own specific expiry time.
Expiries are generally grouped into three categories:
- Short Term / Turbo – These are normally classed as any expiry under 5 minutes
- Normal – These would range from 5 minutes, up to ‘end of day’ expiries which expire when the local market for that asset closes.
- Long term – Any expiry beyond the end of the day would be considered long term. The longest expiry might be 12 months.
While slow to react to binary options initially, regulators around the world are now starting to regulate the industry and make their presence felt. The major regulators currently include:
- Financial Conduct Authority (FCA) – UK regulator
- Cyprus Securities and Exchange Commission (CySec) – Cyprus Regulator, often ‘passported’ throughout the EU, under MiFID
- Commodity Futures Trading Commission (CFTC) – US regulator
- Australian Securities and Investments Commission (ASIC)
There are also regulators operating in Malta and the Isle of Man. Many other authorities are now taking a keen a interest in binaries specifically, notably in Europe where domestic regulators are keen to bolster the CySec regulation.
Unregulated brokers still operate, and while some are trustworthy, a lack of regulation is a clear warning sign for potential new customers.
Recently, ESMA (European Securities and Markets Authority) moved to ban the sale and marketing of binary options in the EU. The ban however, only applies to brokers regulated in the EU. This leaves traders two choices to keep trading: Firstly, they can trade with an unregulated firm – this is extremely high risk and not advisable. Some unregulated firms are responsible and honest, but many are not.
The second choice is to use a firm regulated by bodies outside of the EU. ASIC in Australia are a strong regulator – but they will not be implementing a ban. This means ASIC regulated firms can still accept EU traders. See our broker lists for regulated or trusted brokers in your region.
There is also a third option. Traders who register as ‘professional’ are exempt from the new ban. The ban is only designed to protect ‘retail’ investors. A professional trader can continue trading at EU regulated brokers such as IQ Option. To be classed as professional, an account holder must meet two of these three criteria:
- Open 10 or more trades per quarter, of €150 or more.
- Have assets of €500,000 or more
- Have worked for two years in a financial firm and have experience of financial products.
Strategies and Guides
We have a lot of detailed guides and strategy articles for both general education and specialized trading techniques. Below are a few to get you started if you want to learn the basic before you start trading. From Martingale to Rainbow, you can find plenty more on the strategy page.
Signals and Other Services
For further reading on signals and reviews of different services go to the signals page.
If you are totally new to the trading scene then watch this great video by Professor Shiller of Yale University who introduces the main ideas of options:
Education for beginners:
Types of Trades
How to Set Up a Trade
The ability to trade the different types of binary options can be achieved by understanding certain concepts such as strike price or price barrier, settlement, and expiration date. All trades have dates at which they expire.
When the trade expires, the behaviour of the price action according to the type selected will determine if it’s in profit (in the money) or in a loss position (out-of-the-money). In addition, the price targets are key levels that the trader sets as benchmarks to determine outcomes. We will see the application of price targets when we explain the different types.
There are three types of trades. Each of these has different variations. These are:
Let us take them one after the other.
Also called the Up/Down binary trade, the essence is to predict if the market price of the asset will end up higher or lower than the strike price (the selected target price) before the expiration. If the trader expects the price to go up (the “Up” or “High” trade), he purchases a call option. If he expects the price to head downwards (“Low” or “Down”), he purchases a put option. Expiry times can be as low as 5 minutes.
Please note: some brokers classify Up/Down as a different types, where a trader purchases a call option if he expects the price to rise beyond the current price, or purchases a put option if he expects the price to fall below current prices. You may see this as a Rise/Fall type on some trading platforms.
The In/Out type, also called the “tunnel trade” or the “boundary trade”, is used to trade price consolidations (“in”) and breakouts (“out”). How does it work? First, the trader sets two price targets to form a price range. He then purchases an option to predict if the price will stay within the price range/tunnel until expiration (In) or if the price will breakout of the price range in either direction (Out).
The best way to use the tunnel binaries is to use the pivot points of the asset. If you are familiar with pivot points in forex, then you should be able to trade this type.
This type is predicated on the price action touching a price barrier or not. A “Touch” option is a type where the trader purchases a contract that will deliver profit if the market price of the asset purchased touches the set target price at least once before expiry. If the price action does not touch the price target (the strike price) before expiry, the trade will end up as a loss.
A “No Touch” is the exact opposite of the Touch. Here you are betting on the price action of the underlying asset not touching the strike price before the expiration.
There are variations of this type where we have the Double Touch and Double No Touch. Here the trader can set two price targets and purchase a contract that bets on the price touching both targets before expiration (Double Touch) or not touching both targets before expiration (Double No Touch). Normally you would only employ the Double Touch trade when there is intense market volatility and prices are expected to take out several price levels.
Some brokers offer all three types, while others offer two, and there are those that offer only one variety. In addition, some brokers also put restrictions on how expiration dates are set. In order to get the best of the different types, traders are advised to shop around for brokers who will give them maximum flexibility in terms of types and expiration times that can be set.
Trading via your mobile has been made very easy as all major brokers provide fully developed mobile trading apps. Most trading platforms have been designed with mobile device users in mind. So the mobile version will be very similar, if not the same, as the full web version on the traditional websites.
Brokers will cater for both iOS and Android devices, and produce versions for each. Downloads are quick, and traders can sign up via the mobile site as well. Our reviews contain more detail about each brokers mobile app, but most are fully aware that this is a growing area of trading. Traders want to react immediately to news events and market updates, so brokers provide the tools for clients to trade wherever they are.
What Does Binary Options Mean?
“Binary options” means, put very simply, a trade where the outcome is a ‘binary’ Yes/No answer. These options pay a fixed amount if they win (known as “in the money”), but the entire investment is lost, if the binary trade loses. So, in short, they are a form of fixed return financial options.
How Does a Stock Trade Work?
Steps to trade a stock via a binary option;
- Select the stock or equity.
- Identify the desired expiry time (The time the option will end).
- Enter the size of the trade or investment
- Decide if the value will rise or fall and place a put or call
The steps above will be the same at every single broker. More layers of complexity can be added, but when trading equities the simple Up/Down trade type remains the most popular.
Put and Call Options
Call and Put are simply the terms given to buying or selling an option. If a trader thinks the underlying price will go up in value, they can open a call. But where they expect the price to go down, they can place a put trade.
Different trading platforms label their trading buttons different, some even switch between Buy/Sell and Call/Put. Others drop the phrases put and call altogether. Almost every trading platform will make it absolutely clear which direction a trader is opening an option in.
Are Binary Options a Scam?
As a financial investment tool they in themselves not a scam, but there are brokers, trading robots and signal providers that are untrustworthy and dishonest.
The point is not to write off the concept of binary options, based solely on a handful of dishonest brokers. The image of these financial instruments has suffered as a result of these operators, but regulators are slowly starting to prosecute and fine the offenders and the industry is being cleaned up. Our forum is a great place to raise awareness of any wrongdoing.
These simple checks can help anyone avoid the scams:
- Marketing promising huge returns. This is clear warning sign. Binaries are a high risk / high reward tool – they are not a “make money online” scheme and should not be sold as such. Operators making such claims are very likely to be untrustworthy.
- Know the broker. Some operators will ‘funnel’ new customer to a broker they partner with, so the person has no idea who their account is with. A trader should know the broker they are going to trade with! These funnels often fall into the “get rich quick” marketing discussed earlier.
- Cold Calls. Professional brokers will not make cold calls – they do not market themselves in that way. Cold calls will often be from unregulated brokers interested only in getting an initial deposit. Proceed extremely carefully if joining a company that got in contact this way. This would include email contact as well – any form of contact out of the blue.
- Terms and Conditions. When taking a bonus or offer, read the full terms and conditions. Some will include locking in an initial deposit (in addition to the bonus funds) until a high volume of trades have been made. The first deposit is the trader’s cash – legitimate brokers would not claim it as theirs before any trading. Some brokers also offer the option of cancelling a bonus if it does not fit the needs of the trader.
- Do not let anyone trade for you. Avoid allowing any “account manager” to trade for you. There is a clear conflict of interest, but these employees of the broker will encourage traders to make large deposits, and take greater risks . Traders should not let anyone trade on their behalf.
Which Are The Best Trading Strategies?
Binary trading strategies are unique to each trade. We have a strategy section, and there are ideas that traders can experiment with. Technical analysis is of use to some traders, combined with charts, indicators and price action research. Money management is essential to ensure risk management is applied to all trading. Different styles will suit different traders and strategies will also evolve and change.
There is no single “best” strategy. Traders need to ask questions of their investing aims and risk appetite and then learn what works for them.
Are Binary Options Gambling?
This will depend entirely on the habits of the trader. With no strategy or research, then any short term investment is going to win or lose based only on luck. Conversely, a trader making a well researched trade will ensure they have done all they can to avoid relying on good fortune.
Binary options can be used to gamble, but they can also be used to make trades based on value and expected profits. So the answer to the question will come down to the trader.
Advantages of Binary Trading
The main benefit of binaries is the clarity of risk and reward and the structure of the trade.
Minimal Financial Risk
If you have traded forex or its more volatile cousins, crude oil or spot metals such as gold or silver, you will have probably learnt one thing: these markets carry a lot of risk and it is very easy to be blown off the market. Things like leverage and margin, news events, slippages and price re-quotes, etc can all affect a trade negatively. The situation is different in binary options trading. There is no leverage to contend with, and phenomena such as slippage and price re-quotes have no effect on binary option trade outcomes. This reduces the risk in binary option trading to the barest minimum.
The binary options market allows traders to trade financial instruments spread across the currency and commodity markets as well as indices and bonds. This flexibility is unparalleled, and gives traders with the knowledge of how to trade these markets, a one-stop shop to trade all these instruments.
A binary trade outcome is based on just one parameter: direction. The trader is essentially betting on whether a financial asset will end up in a particular direction. In addition, the trader is at liberty to determine when the trade ends, by setting an expiry date. This gives a trade that initially started badly the opportunity to end well. This is not the case with other markets. For example, control of losses can only be achieved using a stop loss. Otherwise, a trader has to endure a drawdown if a trade takes an adverse turn in order to give it room to turn profitable. The simple point being made here is that in binary options, the trader has less to worry about than if he were to trade other markets.
Greater Control of Trades
Traders have better control of trades in binaries. For example, if a trader wants to buy a contract, he knows in advance, what he stands to gain and what he will lose if the trade is out-of-the-money. This is not the case with other markets. For example, when a trader sets a pending order in the forex market to trade a high-impact news event, there is no assurance that his trade will be filled at the entry price or that a losing trade will be closed out at the exit stop loss.
The payouts per trade are usually higher in binaries than with other forms of trading. Some brokers offer payouts of up to 80% on a trade. This is achievable without jeopardising the account. In other markets, such payouts can only occur if a trader disregards all rules of money management and exposes a large amount of trading capital to the market, hoping for one big payout (which never occurs in most cases).
In order to trade the highly volatile forex or commodities markets, a trader has to have a reasonable amount of money as trading capital. For instance, trading gold, a commodity with an intra-day volatility of up to 10,000 pips in times of high volatility, requires trading capital in tens of thousands of dollars. However, binary options has much lower entry requirements, as some brokers allow people to start trading with as low as $10.
Disadvantages of Binary Trading
Reduced Trading Odds for Sure-Banker Trades
The payouts for binary options trades are drastically reduced when the odds for that trade succeeding are very high. While it is true that some trades offer as much as 85% payouts per trade, such high payouts are possible only when a trade is made with the expiry date set at some distance away from the date of the trade. Of course in such situations, the trades are more unpredictable.
Lack of Good Trading Tools
Some brokers do not offer truly helpful trading tools such as charts and features for technical analysis to their clients. Experienced traders can get around this by sourcing for these tools elsewhere; inexperienced traders who are new to the market are not as fortunate. This is changing for the better though, as operators mature and become aware of the need for these tools to attract traders.
Limitations on Risk Management
Unlike in forex where traders can get accounts that allow them to trade mini- and micro-lots on small account sizes, many binary option brokers set a trading floor; minimum amounts which a trader can trade in the market. This makes it easier to lose too much capital when trading binaries. As an illustration, a forex broker may allow you to open an account with $200 and trade micro-lots, which allows a trader to expose only acceptable amounts of his capital to the market. However, you will be hard put finding many binary brokers that will allow you to trade below $50, even with a $200 account. In this situation, four losing trades will blow the account.
Cost of Losing Trades
Unlike in other markets where the risk/reward ratio can be controlled and set to give an edge to winning trades, the odds of binary options tilt the risk-reward ratio in favour of losing trades.
When trading a market like the forex or commodities market, it is possible to close a trade with minimal losses and open another profitable one, if a repeat analysis of the trade reveals the first trade to have been a mistake. Where binaries are traded on an exchange, this is mitigated however.
Spot Forex vs Binary Trading
These are two different alternatives, traded with two different psychologies, but both can make sense as investment tools. One is more TIME centric and the other is more PRICE centric. They both work in time/price but the focus you will find from one to the other is an interesting split. Spot forex traders might overlook time as a factor in their trading which is a very very big mistake. The successful binary trader has a more balanced view of time/price, which simply makes him a more well rounded trader. Binaries by their nature force one to exit a position within a given time frame win or lose which instills a greater focus on discipline and risk management. In forex trading this lack of discipline is the #1 cause for failure to most traders as they will simply hold losing positions for longer periods of time and cut winning positions in shorter periods of time. In binary options that is not possible as time expires your trade ends win or lose. Below are some examples of how this works.
Above is a trade made on the EUR/USD buying in an under 10 minute window of price and time. As a binary trader this focus will naturally make you better than the below example, where a spot forex trader who focuses on price while ignoring the time element ends up in trouble. This psychology of being able to focus on limits and the dual axis will aid you in becoming a better trader overall.
The very advantage of spot trading is its very same failure – the expansion of profits exponentially from 1 point in price. This is to say that if you enter a position that you believe will increase in value and the price does not increase yet accelerates to the downside, the normal tendency for most spot traders is to wait it out or worse add to the losing positions as they figure it will come back. The acceleration in time to the opposite desired direction causes most spot traders to be trapped in unfavourable positions, all because they do not plan time into their reasoning, and this leads to a complete lack of trading discipline.
The nature of binary options force one to have a more complete mindset of trading off both Y = Price Range and X = Time Range as limits are applied. They will simply make you a better overall trader from the start. Conversely on the flip side, they by their nature require a greater win rate as each bet means a 70-90% gain vs a 100% loss. So your win rate needs to be on average 54%-58% to break even. This imbalance causes many traders to overtrade or revenge trade which is just as bad as holding/adding to losing positions as a spot forex trader. To successfully trade you need to practice money management and emotional control.
In conclusion, when starting out as a trader, binaries might offer a better foundation to learn trading. The simple reasoning is that the focus on TIME/PRICE combined is like looking both ways when crossing the street. The average spot forex trader only looks at price, which means he is only looking in one direction before crossing the street. Learning to trade taking both time and price into consideration should aid in making one a much overall trader.
Binary Options Strategies
What are Binary Options strategies?
They are sets of indicators or rules that allow you to have a plan to negotiate with Binary Options. This allows finding patterns in the market that facilitates decision making at the time of putting the operation.
There are many different strategies, some work from the analysis of the charts with the help of technical indicators, others work with the help of the financial data and economic news.
Some work better in some market conditions.
Others simply don’t work at all.
In this post, you will learn some of the most used and common strategies used in Binary Options.
What are Binary Options?
The shortest Binary Options definition is to bet on the fall or rise of a price on financial assets with an expiration time.
Contrary to other markets, like Stocks, we do not buy an asset, but we only bet on the price value of the asset we are trading.
According to one of the most important investment websites:
Binary options offer market players a great way to trade on the direction of an asset or the overall market due to their all-or-nothing character. In addition to straight-forward risk/reward profiles and defined risk, they can be used for shorter-term strategies due to hourly, daily or weekly contract expirations. in Investopedia
What is the best Binary Options strategy?
There is no number #1 strategy, the perfect one. There are a number of factors such as the day, type of asset, time, and even the trader’s profile that influence the results of a strategy. So all of this goes into the equation.
The best thing to do is to have several strategies, and understand how the market works, in order to choose the best one to the present market conditions and time od the day.
Test each strategy, and learn exactly in what conditions you should use it.
Where do I find strategies for Binary Options?
On this site, you will find several strategies to use in Binary Options. We also have courses that complement the strategies.
How Many Strategies Are There To Negotiate And Win With Binary Options?
There are lots of Binary Options Strategies.
Some are more technical and imply some time to learn, to read graphs and to understand one or another technical indicator, others are purely fundamental (connected to the market news) and they don’t imply understanding technical analysis.
I think most of the readers who will read this article are because they are beginners in Binary Options.
For this reason, I will only address some strategies, and try to explain as simple as possible. I see that some sites speak of dozens of strategies, using 3, 4 and 5 indicators for each.
I, being a trader for several years, I have difficulty understanding, I imagine someone who is a beginner in Binary Options …
Thus, the idea is to approach the main strategies of Binary Options in a simple way to understand and with few indicators, so that it is relatively easy for a beginner to understand and start practicing.
If, after understanding how to negotiate, you want to move to more technical and complicated situations is up to you.
I am of the opinion that sometimes the simplest is what gives us better results, as long as we do it the right way.
Rule number one of the Binary Options Strategies – none of the Strategies that exist are infallible. Neither is bad… well, some are even more than bad, they are awful.
Each trader must try some, test and realize which one is best suited to him.
Usually, people like to test the Binary Options Strategies with demo accounts and then use real accounts.
Many websites advise you to always test yourself in Demo Accounts, and only after seeing results work with a real account.
I always test in Real Accounts, using as little value as possible.
I do so because when we test in Demo we are not afraid to lose because there is no real money involved, so we end up making decisions that will be different when we do it in real mode.
Therefore, many traders have good results in Demo and then in Real Accounts that does not happen.
However, both situations (test in Real Account or Demo Account) have their advantages and disadvantages. It should be you choosing the best method to learn.
When choosing a strategy you should exploit it to the fullest to become an expert and be able to make money.
It is important to realize that there are days when a certain strategy does not work because the market is not acting in a coherent way.
These days it is better not to negotiate. Normally after 3 missed deals, the ideal is to stop and return the next day.
If the situation repeats, you should try another asset or use a different type of time interval that you were using with this binary options strategy.
Check the best and most used Trading Strategies:
Below you can find some of the most used Binary Options Strategies.
Make money at IQ Option:
This strategy was developed by me when trading on the IQ Option platform.
It is a strategy that works for 2 minute expiration time, and one of my favorite strategies to trade Turbo Options or 60 second Options.
It is one of the strategies that are offered to our students or referral.
It is simple to set up on the platform and very effective. It can be used with Martingale.
This Simple strategy works with few indicators and suitable for beginners who are still learning.
It is the ideal strategy to start with because it is really simple to apply. It’s free for everyone, just download and use.
News Trading Strategy
News Trading Strategy or also called a fundamental strategy is a very old type of Strategy used in all other markets such as Forex or Stock Exchange.
For many traders, it is a simple and very practical way to trade and make significant profits.
Support and Resistance Strategy
The support and resistance strategy is very used in the Forex and Stock markets with very interesting results.
There are several automated trading systems (algorithmic trading) that are developed using the support and resistance strategy as their trading basis.
Trend Following Strategy
The Trend Following is probably the strategy with the most followers or at least one of the most followed in binary options.
The trend-following strategy is so widely used because it’s very easy to understand and put into practice, and above all, it does not involve the analyses of many indicators and charts.
binary options market trends
60 Seconds Strategy
At the risk of going against what most binary options websites and blogs claim, I say the 60 Seconds Strategy does not exist.
What exists is a binary options type of trade, using existing strategies, with a very short time interval. 60 seconds is just one of the formats available for this financial instrument.
In addition to the binary options strategies, it is necessary to have other knowledge to be able to have consistent results in this market.
It is fundamental to learn rules, to learn to have discipline, to have emotional control, in addition to all the technical knowledge in reading the graphs and indicators.
Only the right knowledge leaves a trader ready to make money consistently and durably.
Only with a strategy, even if it is the best strategy in the world, I bet he will not be a successful trader.
To learn more about courses that teach everything that is needed (up to 6 strategies, rules, discipline, and emotional control).
If you have any questions or suggestions about Binary Options Strategies do not hesitate to comment or contact me.
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