Most Successful Binary Options Trading Strategy

By | 28/08/2022

Welcome to our binary options strategy section. Here you will find a beginners guide to strategies, leading on to more than advanced information almost things like coin direction, and articles on specific strategies.

Bones Strategy For Successful Trading

Strategy is one of the most important factors in successful binary options trading. It is the framework from which yous base your trade decisions, including your money direction rules, and how you get about making money from the market. There is no ane Holy Grail unfortunately, if there were so we’d all be using it!

The ii most very basic categories of strategy are:

  • Fundamental
  • Technical.

Fundamental strategies focus on the underlying health of companies, indices, markets and economies and while of import to understand, is non equally important to binary options equally the technical aspect of trading.

Technical trading, or technical analysis, is the measurement of charts and price activeness, looking for patterns and making educated guesses, speculations, from those measurements and patterns.

Strategy simplifies your trading, takes guesswork out of choosing entry and reduces overall run a risk.

The text book definition reads similar this;
a plan of action designed to attain a goal or overall aim, the art of planning and directing operations in order to achieve victory. When information technology comes to trading the goal is to 1) make money and two) non lose money.

The number one method of achieving this goal is to use a rules based arroyo to choosing entries that relies on ages old, tried and true technical analysis indicators. There are dozens, possibly hundreds if non thousands, of means to trade the market, all strategies. They tin can exist categorized in terms of the tools used, the time frames intended, the amount of take a chance associated with and many other ways, these being the master.

  • Price Action/Scalping Strategies
    – Price activity strategies rely on the movement of the market to fourth dimension entry. These can exist trend following or non, long or brusque term and utilize bullish or surly positions.
  • Tendency Following/Directional Strategies
    – Trend following strategies target assets that are trending strongly to pinpoint a series of profitable entries with a loftier charge per unit of success.
  • Range Bound/Short Term Strategies
    – 99% of the time the marketplace, or an private nugget, is not trending only trading in a range within a high and low mark. These strategies focus on back up and resistance levels, reversals inside the range and short term trends equally asset prices move upward or down from support to resistance and vice versa.
  • Long Term/Momentum Strategies
    – These are the less risky of the strategies as they target stronger signals and longer term time frames. These signals have a college chance of success but take longer to develop and longer to unfold than other types of signals.

A technical analysis indicator is, almost often, a mathematical formula which converts cost action into an easy to read visual format. Common types of indicators include merely are not limited to moving averages, trend lines, support and resistance, oscillators and Japanese Candlesticks.

Money Management

Strategy is ane of the 2 pillars of risk management, the other is money management. Yous control risk past targeting only good signals, weeding out apparently bad signals, and never putting so much coin on one trade that it will wipe out your business relationship.

Money management is the command of your overall trading fund. It should clarify merchandise size, and long term financial management – leaving you lot to focus only on trading. A well thought out coin direction structure should simplify:

  • Trade size
  • Take chances management
  • Future growth
  • Stress

A trader with a clear financial plan should not need to be concerned with whether they can trade tomorrow, or if their trade size is right or how they might grow investments in line with their progress. All those decisions are controlled by managing their overall upper-case letter with a clear plan.

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Read more than on money direction.

Japanese Candlesticks

This is the most common method of viewing toll charts. The candlesticks give an piece of cake to read view of prices, open high depression and close, that jumps off the charts in style that no other charting style can practice. They are the basis of virtually price action strategies and tin can exist used to requite signals as well every bit to confirm other indicators.

Read more than about candlestick strategy

Support And Resistance

These are areas of toll action on the asset chart that are likely to stop prices when they are reached. Support is found when prices stop falling, this happens when buyers stride into the market and are said to be “supporting prices”. Resistance is found when prices terminate rise, this happens when sellers enter the market (or buyers disappear) and are said to be “resisting higher prices”. These areas, often represented by horizontal lines, are good targets for entries and possible areas where price action may opposite.

Trend Lines

These lines connect highs and lows formed by asset price as information technology moves up down and sideways. A series of higher lows and higher highs is considered to be an uptrend and a sign that prices are likely to motility higher, a series of lower highs and lower lows is considered to be a downtrend and a sign that prices are likely to move lower. The trend line tin can be used equally a target for back up and resistance, as well as a an entry point for tendency following strategies.

Moving Averages

Moving averages take an average of an avails prices over X number of days and and then plots those values as a line on the toll chart. Moving averages come up in many forms and are often used to determine trend, provide targets for support and resistance and to point entries. In that location are dozens of methods of deriving moving averages, the most mutual include Elementary Moving Averages, Exponential Moving Averages, volume weighted moving averages and many more. They tin be used in any fourth dimension frame, and set to any fourth dimension frame, for multiple time frame analysis and to give crossover signals.


Oscillators may be the unmarried largest segmentation of indicators used for technical assay. They include tools similar MACD, stochastic, RSI and many, many others. These tools, in general, use price action and moving averages in a combination of means to make up one’s mind market health. They are displayed as a stand lone tool, ordinarily equally a line that ranges between two extremes or above and below a mid point, that can help make up one’s mind trend, direction, back up/resistance, market force, momentum and entry signals.

Trading Psychology

With whatever grade of trading, psychology can play a large part. A lack of confidence tin mean missed trades, or investing also piddling majuscule in winnings trades. At the other end of the spectrum, over-confidence tin lead to over trading, or increased gamble – either of which could wipe an account very quickly.

So the trading psychology of the trader is very important. It can besides be actively controlled or managed (at the very least, acknowledged). It is another ofttimes disregarded surface area of trading skill, just one well worth spending time to consider.

Read more on trading psychology and learning from experience.

A Basic Binary Options Strategy

Here is an example of some bones rules for a binary options strategy.

  • The trend is your friend, simply accept tendency following entries.
  • In an uptrend only enter when prices are near back up, in a downtrend merely enter when prices are near resistance.
  • When prices are near back up/resistance wait for a confirming candlestick signal.
  • When the candlestick point appears wait for stochastic and/or MACD to ostend, a bullish crossover in an uptrend or a surly crossover in a downtrend.
  • When rules 1 through 4 are met, enter the trade, but use 3% of account on each trade.
  • When choosing decease utilise 2XCandle length. IE, if y’all are using 1 minute candles then ii minute expiry, if one hr candles then 2 hour expiry.
  • If the merchandise fails examine why it did not work, make aligning if necessary and motility on to the adjacent trade. If the merchandise works move on to the next trade.
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Summit Brokers

No strategy is going to be assisting if you merchandise with an unreliable broker. These are our top recommended trading platforms for trying out your strategy.

General adventure alarm: your capital is at take a chance

* Amount is credited to business relationship in case of successful investment

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Choosing a Trading Strategy

Developing a trading strategy for the binary options market place requires a central understanding of how the market operates in terms of the trade contracts available, the various death times, and the agreement of the behaviour of the individual assets.

Unlike the forex market where the nugget has to move in ane management or the other by an observable number of pips to the trader’s favour before profits are fabricated, the binary options market is peculiar. Apart from the Upward/Down trade which is based on direction and mimics the requirements of the trades in other markets (except the pip movements), other trade types in the binary option market operate in totally different ways. There are different trade contracts for different platforms. Some binary options contracts do non even require the trader to get the management of the asset right. For instance, trading the OUT contract will need the asset to hitting one cost boundary or the other for turn a profit to be made. So information technology takes the trader being able to place a suitable merchandise contract to be able to style a suitable strategy. What is used to trade the Upward/Down contract is not the same equally will be used for the In/Out contract. The contract blazon will make up one’s mind the strategy.

For example, trading the Upward/Downwards contract will crave a strategy that can determine if the nugget will make a bullish or bearish movement. Trading the In/Out contract volition require either a range trading strategy or a breakout trading strategy to place a time when the asset stays in a range or breaks out of that range. If yous are looking to develop a trading strategy for the In/Out trade, this is how your heed should be working.

In developing a strategy based on the binary options merchandise types to be traded, in that location are tools that tin assist the trader.  This is where chart patterns, signals services, candlesticks and technical indicators will come in. A unproblematic tool like the pivot signal computer tin exist used as part of a Bear upon trade strategy with very effective results. Using tools like these will take us to the next function of choosing a strategy, which is how to empathize and prepare expiry times.

Understanding Expiry Times

Decease times are very important to binary options, because all trades in this market accept time limits. Notwithstanding, not all binary options trades require fourth dimension limits to be successful. Trades such as the Up/Down trades must achieve expiry before the trade outcome is known. In contrast, trades such as the OUT component of the purlieus trade or the TOUCH component of the High Yield Touch or Touch/No Touch trade contract must not necessarily reach maturity earlier the result of the trade is known. If a trader bets on a TOUCH consequence and the asset touches the strike price well before expiry, the trade outcome is already known and the trade is terminated as a profitable one.

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So if the trader is not very good at setting expiry times/dates (and really, no trader in the market can boast of getting his expiry settings correct all the time here), the binary options trading strategy will have to exist tailored towards trade contracts which are not totally expiry-dependent.

Now when you lot identify and separate trades that are not so dependent on expiries from those that are, you can better sympathize what kind of strategy y’all would be looking at.

Understanding Asset Behaviour

The binary options market combines assets from unlike asset classes into i market. These avails do not behave alike. Some avails are very volatile with large intraday movements. A very clear instance is gold. Some binary options assets are non traded round the clock merely only at specific times e.g. the stock indices. The factors that may trigger a massive move in a stock index would obviously not be the aforementioned for a commodity or a currency. Even inside the same asset class, no two instruments are exactly the aforementioned or behave alike.

An understanding of asset behaviour is therefore cardinal to beingness able to develop a trading strategy for the market. It is up to the trader to written report the behaviour of avails, understand the technical and cardinal indicators that will influence the behaviour and price movement of that asset, and and then create a trading strategy that will piece of work for that nugget.


In this department, we will demonstrate the application of all the parameters nosotros accept mentioned to a higher place using a simple only effective trade strategy.

–       The strategy nosotros will use determines cost bullishness/bearishness, so nosotros volition merchandise a Call/Put contract.

–       We will merchandise the strategy on a i hr chart, so it will be take an expiry of ane hr. We do this using our understanding that the effect we want to trade on the hourly chart, will happen in an hour.

–       We want to use this on an asset that is liquid and responds to the strategy. So we will utilise the EURUSD.

The strategy has been used to create a colour-coded indicator, which shows a green arrow on bullish signals and a cerise pointer for bearish signals. It aims to trade the EURUSD because this currency responds very well to price stimuli during the London/New York overlap in the forex fourth dimension zone, and the response can exist delivered in an hour.

As soon as the red arrow appeared (every bit shown to a higher place), the bespeak was to trade a PUT pick on the Telephone call/Put digital choice. Using this indicate, the trade was executed on the binary options platform. The toll of the nugget (EURUSD) fell in one hour from the time the signal was generated to the death, producing a trade event in our favour.

This strategy (a custom strategy) fulfilled all our weather:

a)    It was suited to a trade contract on the binary options market place.

b)    It was a strategy that was suited to aid the trader use a suitable decease.

c)    It was suited to the behaviour of the asset and above all, THE STRATEGY WAS A PROFITABLE Ane.