Binary Options Trading Strategy.
Following any Binary Options Strategy when trading digital options may significantly increase your chances to be profitable. However, you should stay realistic and be aware than you can never be certain of success. Are binary options strategies infallible?
There is no perfect strategy in trading, no matter what any so called “Guru” or signal provider will tell you. All strategies have some flaws and weak points, and there is no such thing as a perfect mathematical model to achieve profits on the financial markets. When deciding to use a strategy you must be aware all the time that even the best strategy is no guarantee for success. However, this should not discourage you, because certain strategies can be very profitable most of the times. You only have to keep in mind that luck is a very important factor in trading, just as it is in life in general.
What type of binary options strategy exists?
Generally speaking, there are three main categories of strategies when it comes to binary trading:
Type 1: Strategies based on betting models – Those strategies presume that using specific patterns in terms of investment amounts and the right timing can generate profit no matter if the trader is skilled or not at market prediction. Those strategies presume that in certain situations you can design your option buying strategy to give you a high probability of winning. In this category you will find betting pattern strategies like The Grinding Strategy or strategies based on trading the news.
Type 2: Strategies on how to predict the direction of the market better – In this case the strategies are based on simple technical and statistical evidence that in some circumstances the market has greater chances to move in one direction over another. While technical analysis can be pretty complicated, there are much simpler ways of interpreting the charts, especially when it comes to binary trading.
And Type 3 is the simplest strategy and also the one that I mostly recommend; it is to totally imitate other professional player strategy by using Binary Options Trading Signals. If you are beginner, this one greatly assist you to behave correctly in the beginning of your journey.
Binary Options Simple Strategy.
Other than type 3, the strategy that we are going to present is a very simple “Type 2” strategy. Its purpose is to help you predict the direction of the market movement and have a high percentage of options that finish in the money. This strategy is based on the assumption that markets tend to correct themselves after movements in one direction, and the price usually goes up and down. This means that if the price has raised in the previous timeframe, it is more likely to fall in the next one.
Of course, this is not a rule and there will be many times when it won’t happen, especially when the market is on a trend, but when the market is calm and fluctuations are at small levels (a low volatility) you will most likely see ups and downs constantly.
Binary options usually have a small timeframe and are ideal for this type of technique. The trading platforms of the brokers will show you a recent chart of the asset that is well suited for the option’s timeframe. If an option expires in 15 minutes, you are likely to see the chart for the last 45 minutes and an empty chart for the next 15 minutes like in Figure 1:
Figure 1: USD/JPY one hour binary option chart.
Figure 2: USD/JPY chart after option expiry.
You should also keep in mind when using this binary options strategy that sometime the market is on a trend or some important news may be released that will shake the market to a degree that such simplistic analysis will be useless. This strategy is recommended on calm markets with small trading volumes and no news expected to be released in the following hours.