Learning a Solid Binary Options Strategy
If you are new to trading binary options, you might be a bit overwhelmed at first. This is good. If making money in this type of trading looks like it is too easy, you are approaching it incorrectly and will probably lose money. So instead of attacking these trades like they are easy to beat, you want to be cautious and make sure that you have a solid trading strategy whether it is in Forex, stocks or any other instrument.
There are many Binary Option strategies to choose from. Some work and some do not. Other times, you will find yourself combining strategies. Whatever the case might be, you must remember that you will not win all the time. Like any other type of trading, there is a high degree of risk and variance to be found here.
Below are listed a few of the most successful basic binary option trading strategies.
When you see that a binary option is in a distinct up or downward trend, you can sometimes jump on it and ride the remainder of the price momentum to turn a very quick profit. This is not a difficult plan to execute, but it is not always the most reliable way to make money. Predicting where a trend will end is difficult. Looking at resistance and support lines will help you to refine this strategy and use it to the fullest potential.
Watching candlestick charts is the most effective way to trade on the coattails of trends. This will allow you to see at a quick glance where prices have been and will allow you to get a good idea of where they might go.
Buy Low Sell High
Buying a call option when the price is low makes sense. When the price rises, you can also place a put option in your portfolio as well and have two open trades on the same option at the same time—one call and one put. This strategy is tricky to setup, but if you do it correctly you can sometimes have two very different options make money for you at the same time.
When watching candlestick charts, if there is a downward stick followed by another candlestick that closes down below the low of the previous stick, you can make a good case for a put option. This pattern is oftentimes the harbinger of a downward trending price.
Just because the price of something is not fluctuating in a certain direction does not mean there are no successful opportunities available. By finding a set of candlesticks that are range bound, but still form a triangle pattern, you can sometimes find a good trade. In shorter trading periods, however, this is not as reliable.