Binary options trading may seem like financial markets gambling, but it is not. Successful traders use advanced strategies to help them make the correct predictions, leading to substantial investment returns. This article will show you advanced strategies for trading binary options. Each strategy can be used for a variety of assets and timeframes. But we need to answer one question before we reveal these binary options trading strategies.
Why do you need a Binary Options strategy?
Binary options are a high-risk, high-reward type of financial trading. The vast stakes in each trade require traders to have strict rules to avoid avoidable losses. These rules will help you analyze each option, make sound predictions, and ensure you don’t put your account into financial ruin. Lastly, an excellent binary options trading strategy will help prevent emotional and irrational trading.
Experienced traders have personal trading strategies they have reviewed and perfected over time. These streets allow them to quickly set up trades, manage contracts, and minimize losses. While each advanced trader has personalized trading strategies, the strategies are usually variations of any advanced strategies we will share with you in this article.
The best binary option trading strategies
Here are the top trading strategies for advanced traders. You can adapt any of these strategies to your personal needs and preferences.
False Breakout Strategy
A false strategy happens when the market readjusts to its previous position after a breakout. The false strategy breakout allows you to use this trend to predict the price movement of the asst.
For this strategy to work, you need to identify the support/resistance zone and then wait for the market to break out of that zone. When the market returns to the zone, you can choose to go short or long.
You can use the false breakout strategy with any asset and in any timeframe. However, if you don’t have the time to pay attention to the market, you should use more extended time frames as they don’t require as much attention as small timeframes.
The Trend strategy
The trend follow strategy is excellent for both beginners and advanced traders. It can be applied to all markets and trading amounts. The strategy requires you to study the patterns of lines on the trading graph. The line patterns will show you a trend that you can use to predict the asset price movement. When prices increase, the line goes up. When prices are reduced, the line goes down. There isn’t much information to trade with when the line moves straight horizontally.
While this explanation can simplify this strategy, you need patience and practice to get it right. If you are unfamiliar with analyzing trading graphs, you can do so with demo accounts.
Note that this strategy is not ideal for short trades such as 30 seconds contracts.
The rainbow strategy
To use the rainbow strategy, you need to understand the nature of the asset market and the ongoing trend. The rainbow strategy uses basis signals such as various averages to recognize price changes. The most common indicator is the moving average. Moving averages are used to monitor price changes and decide how soon you can expect a change in the direction of an asset price.
Typically, you will use multiple moving averages to monitor the price direction in real-time. You can make a bet based on your findings when you see a clear direction.
The candlestick strategy
Forex and cryptocurrency traders are familiar with the candlestick strategy as it applies to predicting the direction of an asset price movement. Binary options traders can also use it to predict price movements precisely.
The essential skill for the candlestick strategy is knowing how to read asset charts. Once you’ve learned how to interpret the patterns and movements on the chat, it will be easy to predict the price direction of the underlying asset.
The candlestick strategy requires practice and consistency. Most traders only become experts at the candlestick strategy after devoting themselves to it for several years.
The Money Flow Index Strategy
Consider the money flow index strategy if you are looking for a binary options trading strategy for short-term trades. This strategy is fast and effective and works well for quick binary options contracts that expire in five minutes or less.
While this strategy allows you to make quick multiple trades within a short period, it also comes with many risks. As such, You should incorporate sound risk management techniques when using this strategy.
The main thing to look out for with this strategy is the underlying asset’s demand and supply. These two factors will help you decide if the asset’s price will increase or fall at the end of the contract.
Conclusion of the best Binary Options Strategies
Trading strategies remove the guesswork from binary options trading and allow you to plan and execute your trades properly. They also provide strong signals that you can use to increase your potential profit. Once you’ve decided on a strategy to work with, you should delete your time learning and modifying it to suit your trading styles and needs.
