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Saturday, 6 October 2018

Binary Option Trading Strategy

Trading Binary Options Doesn't Require Experience
The assumption that binary option trading is only done by experienced people is a misperception that circulates in the community. Actually binary option trading does not require experience in finance.
All that is needed is a trading strategy to predict the direction of asset movement. Does the asset value will rise (call) or drop (put).
Binary option players sometimes get big profits by using only simple trading strategies and reliable brokers such as 24Option and IQ Option.
How to minimize risk
Our goal in this paper is to provide effective strategies to maximize your profits. There are several techniques for identifying the signals in the market so you can make the right decision on each transaction. There are several principles for minimizing risk for traders. Trading binary options do contain some risks, but can be minimized with the following points

  • Never invest all your money at once
  • Re-analyze the movement of your trading assets before investing
  • When trying a new trading strategy, use only 5 to 10 percent of your capital
Trading Strategy

There are many assets that can be selected in trading binary options. However, the most effective way to minimize risk is to focus on just one asset. Trading assets that you understand best, such as the euro-dollar currency pair. Stay consistent with these assets until you truly understand the movement and become accustomed to being able to easily predict the movement of the value of the asset. Below are popular strategies that can be used in trading binary options.

1. Trend strategy

The basic trading strategy that is most widely used by all traders. This strategy is also called the bull bear strategy and how it works by looking at 3 trend lines, namely rising, descending and horizontal. For example, if you predict the price will rise but in the trend line it looks flat then the best choice is not to open a position.

If the trend line shows assets will rise, then choose CALL

If the trend line shows the asset price will drop, then choose PUT

The principle of this method is the same as the CALL / PUT option except for the "no touch" transaction type which determines whether the asset price will not touch the target price. For example, currently Google's stock price is $ 540 and the choice of trading type used is No Touch with a limit price of $ 570 and a return percentage of 77%. If the price does not reach $ 570 at the specified time then you will benefit.

2. Pinnocchio's strategy

This strategy is used when asset prices rise or fall drastically. If it is predicted to rise, then choose CALL. if the price is predicted to drop then select PUT. Try this strategy when using a Demo account.

3. Straddle's strategy
This strategy was implemented just before an important news was announced, which made prices rise and fall uncertainly. At such times, this strategy is the most widely used by traders. In this strategy, traders will choose CALL and PUT at once.
The point is that we choose PUT when asset prices rise but there are indications or believe that prices will soon drop dramatically. After a price decline occurs, install a CALL on assets in the hope that prices will rise again in a short time and vice versa. The understanding is to install CALL when the price of assets is low and install PUT when the asset value is high. This strategy will increase the likelihood of making a profit on one of the choices by producing "In the money". This strategy is very popular with traders when the market moves up and down quickly or when certain assets move volatile.
4. Risk reversal strategy or Reversal
This strategy is one of the strategies favored by experienced traders. This strategy aims to reduce trading risk factors and also to maximize profits. The way this strategy works is to install in the CALL and PUT options simultaneously on one asset that has been monitored. Reversal strategies are usually used on assets whose value is volatile. To apply it you open an opposite position on a different type of option with the hope that one or two of them will benefit.
In practice, for example, you open a call position on the high / low option type and then open a low position on the no touch option type. This allows you to benefit from at least one of the options. And if the price reverses then chances are you can benefit from both options.
5. Hedging Strategy
This strategy is also known as Pairing and is widely used by binary option traders and traditional stock trader markets in order to protect themselves and minimize risk. With hedging a trade still provides profits even though the movement of values ​​turns up or down. This strategy provides protection for investors for changes that may occur.
An example of its use is that you are trading a EUR / USD currency pair with the closing time of the option is 6 hours.
Then after 4 hours, your transaction has been profitable, but you are worried about the market news that was released at 5 o'clock. By opening a new option in the opposite direction and setting the closing time the same as the first transaction.
6. Fundamental Analysis
This strategy is usually used in stock trading and traders use it to understand certain assets in more depth. This strategy increases the accuracy of predictions of future price changes.
If you are trading a currency, then you need to dig up information about the economic calendar, report inflation from the country where the currency is used, the political situation and report on its GDP. This information always keeps prices moving up and down according to market participants' expectations.
For stock trading assets, you need a thorough review of the financial condition of a company that you are trading in the asset. The information you need to look for is reports on income, market share and statements of the board of directors. The data is used to understand asset activity and its resistance to economic changes or changes in the financial situation that may occur. So that traders can predict and make the right decisions in all trading situations that will occur in the future. If you use a reliable robot binary option, then you can ignore these steps.

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