Good day, my friends. Yesterday we had a very interesting client.
This is a young man who bet with his friends that he could use binary options to earn money on a new car in three months.
He decided to start with a consultation with us, and most of all he was interested in the strategy of playing binary options.
He received answers to his questions and promised to share the results of his activity. Well, good luck to him. And for you now I will also conduct a detailed analysis of successful strategies.
8 strategies for playing binary options
There are many binary options trading strategies, each with its own advantages and disadvantages.
Some of them are based on analysis of charts of prices of stocks, precious metals, or correlation of exchange rates; others are based on news in the economic world; others take into account the law of probability.
However, it is worth remembering that none of them is definitely a win-win situation and exposes your wallet to a certain risk.
From the variety of ways to guess the price movement of an asset, we can distinguish between those that are quite simple and understandable to any person at first time, and those that require a long study. So, here are some of the most popular strategies.
Choice of traders
Some trading platforms (e.g., OptionTrader) show the percentage of traders who have placed bets on raising and lowering the value of a certain asset.
This strategy offers us to trust the majority (minimum 65%) and place a bet.
The strategy demonstrates the effectiveness of 80-85% of transactions. It belongs to the category of fundamental trading systems and does not imply the use of technical analysis tools.
The choice of traders is suitable for trading with binary options on different groups of trading instruments, including
For example, let’s take the currency pair GBP/CAD.
On the scale of choice of traders we see that 73% of them have bet on a decrease in the price of this asset. We can do the same thing and buy a Put contract.
Similarly, we make deals on Call options – as soon as the scale illustrates the priority of buyers in the market, we can confidently buy Call option.
All types of options can be used as a working tool. Traditionally, this strategy is suitable for classic contracts and high-speed options with a short life span.
However, it can be effectively applied when buying options such as “Stairs”, “Two Touches”, “One Touch”.
The disadvantage of this strategy is that from the time of opening a position to the time of its closing, the price sometimes fluctuates quite strongly, and therefore not even all traders who put on a decrease, will earn money.
The chart shows that the current price is both larger and smaller than some positions from the Start line to the Stop line.
The trading system for binary options “Trends” is the most accessible for newcomers to the financial market. It gives a full picture of the trend direction, thus allowing you to make profitable deals.
Inversiones binarias eToro | Es un corredor creado en el año 2007 por tres emprendedores que fijaron una meta: “crear un corredor dinámico, fácil y divertido”, como lo expresan en la página principal de su sitio web.
Profitability of this strategy can reach 75-85% with the skillful determination of peak values. This trading system belongs to the category of graphical strategies and can be used on different timeframes, as applied to different trading instruments.
Trading system “Trends” can be used when buying binary contracts of such categories:
- Classic options
- Turbo Options
- One touch.
- Two touches.
It is also effective on the sites of some brokers, where there is an “Options constructor”.
To trade this strategy, we need to find a chart that has been moving in one direction for a long time. This is done with the help of support lines and resistance lines, which are held at the minimum and maximum of the waves on the price chart, respectively.
In this chart we see a clear downward trend, as both lines go down, and each subsequent maximum is smaller than the previous one, as well as a minimum.
Sometimes the lines break through the price, but in general, the chart moves down, so it is worth to put on a decrease.
Buying a CALL option is done when the price rebounds from the lower support line. The PUT option should be bought at the turn of the price from the upper resistance line.
However, in this example, the period of time according to which the trend is analyzed is very short – in real trading it is necessary to take into account the movement of prices during the day or week, as this trend may be just another wave, and the price chart will turn in the opposite direction and go up.
The “Trends” strategy is perfect for beginner traders. However, its value can also be traced in the interests of experienced traders – in their working trading systems it can be used as an additional analysis tool.