Successful binary options trading could be done using certain strategies that’ll increase our chance to win, turning a “bettor” into a long-term profitable trader.
What are the types of binary options strategies?
- First type (Technical): These binary options trading strategies assume the use of specific patterns and various techniques to read charts that will eventually greatly increase your chance to win. Majority of day traders use this strategy( 24 hour expiration time options), but it could also be used for long-term trades. This category includes strategies like “GOD Strategy” and more.
- Second type (Fundamental): Second type of the strategy requires a bit of a knowledge. In this case, we have an investor trying to predict the direction of the market, using statistics, evidence and world news. In certain circumstances, there is a great chance that the asset prices will increase or decrease. For example, a drought in Brazil will reduce the price of commodities, like coffee.
And how do the strategies alone, look like?
These following strategies could fall into the first category . Their goal is to predict the direction of the market and there is a great probability for your trade to turn out in one of the two suggested ways – a win. This strategy is based on the assumption that the asset prices return back after a certain fluctuation, which means that if the price was, in the last 60 seconds, increasing, it should now decrease.
Of course, this is not a rule and there is a great probability that this rule won’t work. However, calm market and small movements usually mean that you’ll be seeing a lot of upward and downward slopes of the curve.
Binary options usually have a short expiration date and the numbers get restored quickly and that’s what this technique is ideal for. Platforms usually offered by the brokers show the latest chart movements of assets in the time relevant to you. So, if you are trading assets that’ll expire in 15 minutes, there is a great chance that the broker will offer you a chart from the last hour. If, on the other hand, you are trading assets that’ll expire after 15 seconds, broker will offer you a chart from the last 15 minutes, which will increase the strategy’s accuracy.
If the actual price( in our case 79.7199) is higher that the opening price( 79.6921) the price will much probably soon move down, that’s why we should choose an option called PUT( what is put). On the other hand, if the price would be lower that the opening one, we would choose an option CALL(what is call).
After buying, you should wait until your bought option expires – in our case 15 minutes. You’ll see whether you won or lost afterwords. If the chart went down, the price decreased and you’ve chosen the option put, then you won. In our case, the price have changed and is now at 79.7032,which is less, so we ended up “in money” and generated 81% return. As you can see, the price followed a tendency that we’ve already explained and settled into a starting price. Although we’ll see similar results most of the time, we don’t necessarily have to end up “in money”!
Always remember that if the asset is increasing, meaning that the price is not calm , this option won’t work out. There could always be some news that can disturb the price and this analysis won’t help you, in this case. That’s why this particular strategy is used only with lower assets that are neither increasing nor decreasing and there is no great news expected in the near future that could ruin all our efforts.
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