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A well planned binary options trading strategy will produce accurate and precise transactions which in turn can increase traders’ ROI. A sound approach is an additional tool in the trading career of so many traders across the world. Trading activities involve a lot of risks, therefore traders need to imbibe themselves with key binary options trading strategies to be able to transact in an informative way.
Successful traders have long before adopted these binary options strategies
and adhered to consistent learning before jumping into the sea of binary trading. So why not you? Since most of the trading periods pertain to varying time limits, binary options strategies have been used to calculate the detailed movement of assets and accurately speculate their movement. Many of these trading strategies are used within the context of the time limit that a trader has chosen.
The main levels in binary options strategies are beginners, intermediate and advanced. A detailed explanation has been exclusively brought to you by SquareOne.
For beginners, it is imperative to understand the market first before heading out to trade. There are definitely a lot of binary options strategies that exist which are claimed to be best while trading. But as markets are volatile, beginners have a hard time implementing most of the trading strategies at the right time. Many beginners have a harsh time when they first step into the trading world, and they do not have a sound knowledge of the different trading strategies offered to them.
For beginners, here are some listed binary trading strategies:
Trading is definitely easier when you have tailored binary trading strategies in place, but such skills are acquired with great patience and planning, since it is difficult to grasp all at once. Any beginner who want to learn binary trading, will find enough support and can generate significant profit if well used.
Firstly, it is important to know more about all assets and their respective complexities. Assets are normally divided into 4 categories, which are currencies, commodities, stocks and indices. Each of these assets have their own set of characteristics and differ in terms of trading. When traders or investors understand the functioning of each asset, then only they can start to devise a well planned binary options strategy, since all assets do NOT fluctuate in the same way, the price movement is different for each of them.
Moreover, ever heard of “Practice makes perfect”? Well these little words will now help traders better understand the world of binary trading. Traders need not invest huge sums of money in the beginning, as it is important to learn while trading in a step by step process. Investing large sums of money in the beginning will further impede progress, as loss at the first time might discourage a trader from going further in his trading career. Invest little sums of money, practice little trades on a shorter period, look for information and learn how the trading world functions. Only then a trader will be ready to proceed further.
Furthermore, choosing the right binary broker is fundamental to any trader’s success. Know your platform before heading out to trade. Gather information on a trading platform and learn the trading tactics offered. Not all brokers offer adequate information, but with AlphaBinary, traders are offered an exquisite opportunity to enhance their trading career.
Lastly, fundamentals and reviews play a vital role in implementing a trading strategy. As and when a trader starts transacting, it will become important to keep an eye on the economic releases pertaining to key economies which affect the trading world immensely. Each piece of news will be difficult to grasp, but when placing small trades at the beginning, a trader shall learn to analyze markets slowly. Also, AlphaBinary provides a trader with interesting tools through AlphaHub and daily market analysis. Therefore, choose an asset, make a prediction, choose an amount to invest and wait for expiry. Simple, isn’t it?
Intermediate trading strategies are offered for those traders who want to maximise their chances of winning on more trades after having their first experience in the trading world. Therefore, these kind of traders look for more intricate trading strategies to further strengthen their grip on the world of binary trading.
Here are two most used intermediate binary options strategies:
The binary triangle trading strategy is available in three categories which are available on charts. The Ascending Triangle refers to a type of triangle which shows a horizontal line being crossed by an ascending line on the charts. This shows how higher low prices meet against higher resistance levels. Higher demands on the market displays how resistance in prices fluctuate. When the prices climb higher and meet the resistance level, there is an ultimate breakout towards the upper region on the chart.
The Descending Triangle refers to when lower highs meet with the support level. When prices climb higher and meet resistance level, there is a time, when prices come down to support level, in order to bounce back on the charts. Since an assets’ prices fluctuate highly, supply and demand collide with each other because of growing uncertainties on the market. This helps to understand the anomalies pertaining to fluctuating markets.
To conclude the binary options triangle trading strategy, it is important to verify breakouts on each level of these triangles. When scrutinizing the Ascending triangle, look for the resistance level, as the asset will sooner or later break above the resistance line, then place your CALL option near or slightly above the resistance line. On the contrary, on a Descending triangle, place a PUT option near or at the support level.
Binary trading comes with a lot of risks involved and risk management is important. Stop loss refers to the trades that have been placed and can be sold or bought when it reaches a certain price. The function of stop loss is to limit an investor’s loss during a particular trade. If trades do not go the way a trader desired to, then it becomes necessary to know when to step out, and stop any further loss. Verify support and resistance lines closely and determine when to be able to stop the trade, as soon as the market swings against a trader.
When determining a stop loss level, it is important to know when to step out and take profit before the market reverses. This comes right after having stopped a loss. Stopping a loss, also means taking profit, because a trader has been able to stop the loss. Therefore, it is also vital to know and calculate the amount of profit that a trader will beget after halting the loss.
Advanced traders refer to those who have gone through the beginners and intermediate phases, and are now ready for stronger challenges on the financial market. Binary trading offers more opportunities for advanced traders through different strategies. Many advanced traders will opt for long term trading, and in order for those trades to be effective, it is imperial to use strong trading strategies.
Two very interesting and effective advanced binary options strategies are:
The Ichimoku Cloud refers to an important indicator that can be used on any specific chart, once a trader has grasped more about fundamentals and analysis. This advanced technique shows a trader, how exactly the market can fluctuate. The Ichimoku Cloud, is an indicator that can be placed on a chart, and know the exact movement of prices.
When the Ichimoku Cloud hovers above the candlesticks on a chart, it signals towards a bearish market. On the contrary, when the Ichimoku Cloud hovers below the candlesticks, it shows a bullish market. When the candlesticks navigate within the Ichimoku Cloud, the market will likely consolidate, or in plain terms, it will remain stagnant around a certain range of price. When the two line of the Ichimoku Cloud intersects, a probable change of the market might take place. On spotting an intersection, immediately look for important fundamentals which can cause the change and then match your prediction according to the intersection. Many accurate trading strategies can be devised through this method.
The relative strength index indicates towards where exactly the point of selling and buying an asset hovers. The RSI is divided into two ranges : the 50 to 70 handle and the 50 to 30 handle. When the RSI indicator hovers around the 60 handle, then a perfect selling position can be determined, otherwise, if the RSI indicator hovers around the 40 handle, then a perfect buying position can be signaled. If ever the RSI indicator surges above the 70 handle, then there might be an overbought section where there are more buyers than sellers. If ever the RSI indicator goes below the 40 handle, there might be an oversold section, where there are more sellers than natural buyers.
Therefore strategies for trading binary options are an excellent medium to know when and how to trade on extremely volatile markets. Beginners, intermediate and advanced traders will find what they need and SquareOne will further contribute to traders’ trading endeavour.