Trading forex binary options is
often referred easier than spot forex. How come? You only need to select the
"call" when estimating the price will rise, or "put" when
you're sure the price will go down. There are no calculations lot, spread, and
how much you will profit or loss can be directly known even before entry.
Still, in order to know which way the price, you should do an analysis and have
a specific strategy in order to get the desired profit.
Binary options trading strategy is
very diverse, ranging from based on expiry time such a strategy 1 minute, 5
minutes and 15 minutes, by applying certain indicators such as Bollinger bands
and MACD. There are also several strategies that follow the direction of such a
price trend and sideways trading, which also rely on candle patterns such as
pin bar and inside bar. Strategies that focus on how to trade like a hedge,
reversal, and straddle are also not spared from the list of methods that you
can use in binary options. Then, of many of these strategies, are the best?
The answer to every trader could
have been different, because every strategy has the features, advantages, and
disadvantages of each. Therefore, the best advice in choosing the strategy is
to pick which one is most familiar to you, also according to your trading style
and needs. For example, if you're the kind of aggressive trader and responsive
to changes in price, you can take a short-term strategies such as trading
binary options 1 minute.
The variety of answers to the best
strategy does not mean there is no list of recommended methods altogether.
Below is a list of 5 best trading strategy in binary options that you should
try:
1.
Strategy Trends
Undeniably, trend of price always
carry the potential priceless. Both in spot forex and binary options, the trend
much more valued as the most ideal conditions for entry. Although binary
options are no longer account for a large price movement to weigh the benefits,
but open option when the price is trending strongly preferred fixed. This is
because the trends can be easier for you to analyze the direction of price
movement. If the trend continues, you can more easily take the option to
"call" or "put" more convincing.
Because of the above advantages, the
strategy chosen trend traders binary options, whether novice or experienced.
The indicators are popularly used in this strategy is the MA (Moving Averages)
and trend line. Generally, the trend-following traders will be looking for a
signal forwarding, while those who like to fight against the current, more look
for reversal signal. A more complete discussion of how trading with the trend
of binary options strategy you can find on this page.
2.
Pin Bar Strategy
This strategy relied pin bar, which
is formed by candle with a small body and a long axis beyond his big body. Pin
bar reversal signal is one that is quite trusted by many traders. Good as a
leading indicator or just yet confirming, the emergence of the pin bar is
always considered important.
The layout of the bar pin axis
longer can be taken as a guide to predict which direction the price will
reverse. For example, a long axis of the pin bar are located at the bottom of
the candle is called a bullish pin bar. If this occurs after the pin bar before
there is a bearish candle, then the pattern could be a signal that prices will
turn bullish.
3.
Hedging Strategy
One more strategy that should be
considered in binary options trading is hedging strategy. In binary options,
the use of hedging strategies can be more flexible, because binary options
broker is generally not prohibit traders to put option is the opposite in an
instrument at the same time. Because of this convenience, you can maximize
opportunities to better hedging.
The primary purpose of hedging is to
actually anticipate the loss of the option will expire out-of-the-money. So if
you've got the option "call" that will expire in 5 minutes, but the
price still move inside the bearish sentiment is strong, you can open the
option "put" new to offset the potential loss of the first position.
But before applying this strategy, it helps you learn to understand hedging
risks first. Although it appears to be effective on the outside, but users are
less than optimal hedging it can double the risk of loss. To see what important
things to consider when hedging binary options, please visit this article.
4.
Strategy Risk Reversal
Similar to hedging strategies, risk
reversal is also a method that is executed by opening the second option
"call" and "put" in the same time. The difference is, the
purpose of risk reversal here not only to minimize the risk, but also create
new advantages. Then, how do?
If you have learned how to hedge,
then you will not be difficult to try risk reversal strategy. There are many
differences in the way the implementation of both strategies. For risk
reversal, you just need to put the amount of capital that is different in the two
options that you have open. Capital Most certainly you place on the option you
most believe will be successful. Thus, although one option will expire
out-of-the-money, there will be profit you've won here. You can open this page
to see a clearer example of the use of risk reversal. Also, this strategy will
be more profitable if your broker has the facility to refund a failed option.
5.
Straddle Strategy
Straddle strategy is still
associated with the placement of the "call" and "put"
simultaneously. Here, there is an emphasis on price conditions and the way of
analysis that can help you locate potential level for entry-level option.
Basically, straddle concentrated focus on support and resistance as a barrier
to prices set the area "call" and "put". Levels of
overbought and oversold indicator oscillators can also be used as a potential
entry area.
In the picture above, it appears
that the point of an open "call" and "put" has been adapted
to chart the RSI was overbought and oversold. You can take advantage of such
opportunities by adjusting the expiry time that both these options expire at
the same time. If you succeed, the advantage is not only derived from one
option, but the second option will equally generate profit.
It should be noted that the
determination of the expiry time is the key in the straddle strategy. This is
because you will not be able to profit if your 2 new option closed when prices
have gone through one of the levels of support or resistance. To that end, the
determination of the price range of valid and stable conditions of market
volatility is required, so you can be sure that prices will remain in the range
when the option expire.
Do
not Forget About This Two Things
Regardless of all means and analysis
that can be applied in the five strategies above, your trading will not work if
you do not pay attention to these two important aspects:
• Fundamental Analysis
Noting the fundamental release is an
important component that you should always pay attention, because it can be
devastating for your trading decisions. For example, the choice of options with
more capital at risk reversal strategy can also be influenced by fundamental
data releases. By observing the factors driving prices fundamentally, you will
be able to anticipate changes in trends, volatility, market sentiment, also the
best moment of entry.
• Risk Management
This section is a trading aspect
that you need to always include. Although five of the above strategies can be
called as the best, but still no one can bring definite results. In other
words, the rate of profit is merely a possibility, as well as the potential
loss. Here, risk management can be used to limit losses to a level appropriate
to the limits of your tolerance. Therefore, any kind of strategy, always fill
out your trading system with risk management. Then, how best tips for arranging
risk management in binary options? You can find the answer in the article Risk
Management In Binary Options.
Translated with several changes of
www.7binaryoptions.com