Many traders believe how binary options trading is nothing more than a mere guess: Will I predict the movement correctly or not? Of course, there is a certain excitement attached to this type of approach that involves high risk, but most binary traders prefer somewhat more reasonable approach. That is when the binary options strategies come in handy. Binary options strategies can be defined as a set of measures or a plan, that will help traders minimize the risk, get a better overall picture and trade better in long-term.
This is what makes binary options trading so much different than gambling: Even though many believe how binary trading is all about luck and being in the right place at the right time, binary options trading is much more efficient when the right strategy is applied. Strategic thinking in binary options can be learned but requires a lot of dedication.
Binary options strategies define what you invest in, how you invest, and how you can improve your trading success. This set of guides will help you to understand the characteristics of binary options strategies.
We always recommend using the demo account prior to real trading, so you can easily test your knowledge and strategies you want to apply. Equipped with a binary trading strategy, you always know exactly what to do, and there is no guesswork in your trading.
Binary options traders know three types of sub-strategies. These types of binary options strategies are:. All of these binary options strategies are essential elements to your binary trading.
Neglecting one type of strategy or following it only half-heartedly will sabotage your trading success and is the surest way to lose money. A successful binary options strategy combines all three sub-strategies into one coherent main strategy. Especially new traders often make the mistake of focusing on their trading strategy exclusively.
In their minds, trading means finding profitable investment opportunities, but they do not know that there are two other, similarly crucial aspects they need to focus on. You can decide to manically run and kick the ball. By using force and high-dense emotions, you will probably score a goal, but you may also loose, or even score an auto-goal because you basically have no idea what you are doing.
If you stop, think, and act mindfully there are higher chances you will be able to act as a team and be consistent. Just because you have a simple strategy. Trading strategies can give traders a deeper insight into how certain trades roll out for you, and after a certain number of trades, you will be able to see some patterns and figure out whether or not a certain strategy works for you.
This will give every trader the opportunity to find the lost opportunities and focus on most lucrative aspects of trading. Also, good money management strategy will allow you to avoid overspending. It is not rare that traders force trades and want to succeed at every cost.
Then they force trading and lose more and more. A money management strategy is just as crucial to your trading success as a trading strategy. By making sure that you always invest an amount that suits your account balance, a money management strategy helps you to grow your capital and survive losing streaks. A money management strategy is a tool that allows you to accomplish this goal.
With a money management strategy, you grow your capital gradually and avoid big setbacks. Without such a strategy, you will become a dabbler. You will try many different things, make some money here, and lose some money there, but you will never find a strategy of which you know that it works.
Instead, you spend your career always chasing the next new trading trend, trying to find a magical tool, but always buying into ineffective ideas. Only a solid analysis and improvement strategy can help you to avoid this fate. It will help you to understand what is working for you and what is not, and to create a definite strategy that allows you to make money. More responsible binary options beginners find it difficult to understand all the complicated terms and tools that are usually included in the binary options trading analysis and strategy development.
This is not very surprising, as whenever we are new to something, we tend to get straight. Still, beginners should have the opportunity to really learn how to trade binary options and not only rely on luck. It is hard to accentuate enough how important is a binary options demo account. Demo account can be defined as really virtual trading. Traders get access to the platform that looks just like the real binary options trading platform provided by the same broker.
They can select assets, price direction, investment amount, use different tools and combine different expiry times. However, the money the invest on a demo account is not real, but only a preprogrammed virtual amount. Both types of demo accounts provide beginners with an amazing opportunity to simply and effectively test their learned strategies before they enter the real world of binary options trading.
However, free demo accounts for binary trading are more accessible and require no deposit, which makes them more interesting for beginners in binary options who have no significant funds available for trading. Even advanced traders prefer testing their binary options strategies on the demo account before they implement it in the real trading process.
Most binary options strategies are based on either directional or volatility trading. This is very interesting and makes binary options almost an exception in the world of trading. Directional and volatility binary trading strategies are of crucial importance for every trader who wants to make a profit.
Binary options strategies for volatility trading are based on the premise that the trader should make a move, not based on the exact direction of the price movement of the underlying asset, but on the movement itself. These binary options strategies are a bit more advanced and require some knowledge as traders must trade on multiple positions. Binary options that have higher expected volatility will be, in most cases, more profitable to trade with.
Directional trading , on the other hand, is based on the trend. A trader can place trades based on the general direction of certain assets. It is advised, that in the case of an upward movement, longer trades should be placed, while in downhill movement shorter expiry times are preferred. Binary options strategies for directional and volatility trading are very interesting and are the base for understanding all other strategies. There are several sub-types for each category, and traders have to do their research to find which strategies they prefer and consider to be best for them.
Also, binary options traders should never neglect the importance of a good demo account, as it allows them to trade binary options and test their binary options strategies in a controlled environment and without the real risk involved as all trades are virtual. There are many binary options strategies, and it seems that as if every website has their own favorites.
Also, there is no doubt that every binary options trader has their own favorite strategies. All traders, including you, should keep in mind that there is no unique solutions for selecting good and appropriate binary options trading strategies.
While there are some objective criteria for selecting the best binary options strategy, there is often personal aspect involved as every trader has a different style, goals, risk tolerance.
In this part of the article, we will reveal top 5 most popular binary options strategies and provide you with a brief description:. As you can see from this article, there are many variations of binary options strategies. Consequently, finding the variation that is ideal for you can take time, especially because every trader is different and it is impossible to recommend a single strategy that suits everyone.
This is a problem. Testing different binary options strategies while knowing that some of them are not for you necessarily involves some initial losses. You might make some rookie mistakes, and you might trade in ways that you feel uncomfortable with, which will result in lost trades.
For newcomers in the binary options who trade with a limited budget, these losses can threaten to end their trading career before it has begun. This is why finding the right binary options strategies is the most difficult step in your trading career. However, discovering strategies is of crucial importance in your development towards becoming a successful trader who knows what he is doing and how to make a profit.
Unfortunately, there is no shortcut, but luckily, there are some tools and innovations that can help you in making progress. Traders get the opportunity to use binary options robots and binary options signals providers in order to achieve the best trading results. Most of this software, either robots or signals providers, are allowing traders to select certain strategies that are automatically implemented in their binary options trading for the best and most reliable results.
Binary options traders should always to a thorough research on their service provider, whether it is binary options broker, binary options robot or binary signals provider, as there are many scams on the market. Luckily, there is also a fair amount of good binary options robots and binary options signals providers, that will make binary trading with different strategies a piece of cake.
Of course, not all binary options traders are complete beginners, and there are more than enough traders who are either advanced or true professionals. Such traders want to know more about advanced binary options strategies, as they already know everything there is about basic strategies. Advanced traders are looking for binary strategies that will take their trading to the next level either by trading gaps, oversold markets, advanced trends or trade swings while implementing an in-depth technical and fundamental analysis.
Advanced binary options strategies require more advanced approach and possibility to look at the complete picture alongside with understanding of possible future events.
Most advanced traders never rely on guessing but are always looking for a new and lucrative trading opportunity they can use to make a profit. Also, they understand all aspects of risk and money management and avoid relying on luck.
They have a deep understanding of all assets, expiry times, binary options types, tools, indicators, different charts and can handle more detailed approach towards binary options trading in every moment. Traders who use advanced binary options strategy understand the importance of the right timing on much higher level.
They also have a winning mindset and plan ahead. They follow the news and market trends without hesitation. Binary options strategies are for them essential in every way.
When the market moves up and down, it rarely moves in a straight line. Instead, the market moves in zig-zag lines, always taking two steps ahead and one step back. These zig-zag movements are called trends, and they are predictable, which makes them a great basis for a strategy. To trade an uptrend, you would invest in a high option; to trade a downtrend, you would invest in a low option. Significant news often have a big impact on the market.
Nonetheless, turning news into a precise trading decision is difficult. Unlike trends, which allow for mathematically exact predictions, news provides you with no indication for how far the market will rise or fall or for how long the market will rise or fall. Of these three types of money management strategies, only a percentage based money management strategy can create long-term success. Without a money management strategy, you will suffer the negative consequences we laid out earlier. You will keep losing money and sooner or later have too little money left to make an investment.More...