Binary Options Strategy

If you are going to be trying your hand at binary options trading, one of the most important tools that you will require is trading strategies.

This is what helps you to improve your odds of making the right prediction, regarding which direction the value of an asset will travel in.

Of course, this probably leaves you wondering how to find the right trading strategy for you.

Unfortunately, this is not something that can be answered simply or immediately. It requires you to be quite familiar, with both binary options trading, as well as the various trading strategies available to you.

Here are a few ways, however, that you can answer this question for yourself:

1. Understand the Common Strategies

Depending on how much experience you have with trading, you may not find it easy to use all of the strategies. You should gather as much information about these tactics as you can. You can categorize the different types of strategies under two main categories:

  1. Market behavior strategies: are by far the most reliable form of strategy. This strategy utilizes statistics, as well as technical indicators, to determine the direction of price movement. The downsides of this type of strategy is, that it is quite complicated to understand (because it involves charts and other tools. With a little bit of study, it can be mastered.
  2. Betting model based strategies: when you customize a particular strategy to maximize the possibility of a particular trade outcome.You don’t really require experience with this option. A good example to describe this is to make a trade that is based on breaking news that you may have heard.

By understanding the choices that are available to you, you will be able to make a more informed decision.

2. Match the Strategy to Your Trade Duration

Once you have explored binary options trading a little more, you will find that there are some trade durations that are more popular than others. The most common option for trades is typically between 60 seconds and five minutes.

However, the thirty second trade can be quite popular as well. More often than not, a trader will choose one particular period over another. This is usually simply because you feel more comfortable with that interval than others.

  • Therefore, it is a good idea to make sure that the strategy that you are opting for fits in well with this trade period.
  • For instance, with a thirty second trade, you may find that conducting market study as well as utilizing 60 second trade charts will come in quite useful.

On the other hand, for two minute trades, you may find that consulting Bollinger bands and the ADX indicator will give you greater levels of success.

3. Rate Your Strategy

This is the step that you will need to put into action once you have more or less decided on your strategy. It is not just merely a question of whether or not your strategy works. It is also about how often it works and the level of profit afforded by this particular strategy.

This accumulation of information will help determine whether you are actually able to get the results that you are looking for. For instance, there is little sense in having a strategy that helps you to win trades but produces only a nominal profit.

Once you are able to discern the weaknesses and the strengths of the strategy you can try to either fine-tune it or move onto another one entirely.

The truth about how to find the right trading strategy for you is not a simple one. More often than not it requires experience that can only be gained through trial and error. Nonetheless, you will definitely be able to find the right fit for you.

 

Page Updated: 14 February, 2017