Binary Options Strategies

To become a successful binary options trader, you need two tools: A trading strategy and a money management strategy. Both combine to create the basis that can make you successful in any market environment, but if you try to trade without either strategy, you are sure to lose money. Learn all about the binary options strategies you need here.

More and more traders also rely on signals as part of their strategy. Signals are recommended trades identified by advanced computer systems. All professional traders will use some sort of trading software to help analyse the market, and make predictions about future price movements. Basing your strategy on binary signals, can help you trade like a pro.

This article, Binary Options Strategies, outlines the basics of these approaches to binary strategies and provide you with links to relevant articles, thereby enabling you to create your own trading strategy and your own money management strategy. You will also find the information you need in order to decide whether signals are right for you or not. This article is the perfect starting point for new traders.

The binary options strategies you need for success

1. Trading strategy

Binary options work on short time frames. In such a fast-paced environment you need a concrete plan to know what to invest in, when to invest, and which type of binary option to use. This plan is your trading strategy, allowing you to constantly make money over a long period of time. With your trading strategy, you can find trading opportunities and decide how to capitalize on these opportunities.

The foundation for your trading strategy is technical analysis. Technical analysis allows you to find trading opportunities for every asset, even if you have never heard about it before. There is almost an endless possibility of binary options strategies based on technical analysis. To provide you with a starting point, here are some of the most popular trading strategies:

  • Trading the breakout: When the market completes a pattern from technical analysis, it will create a short, strong movement. This movement is ideal for binary options. You can trade a binary option in anticipation of the breakout, in reaction to the breakout, or in reaction to the pullback, or a combination of these methods; and you can use high / low options, one touch options, and even ladder options.
  • Trading trend lines: When the market moves up and down, it rarely creates a straight line. Most of the time, the market moves in a zig-zag movement that adheres to a trend line. With binary options, you can trade this trend as a whole, invest in each swing individually, or eventually trade the market breaking through the trend line.
  • Trading percentage retracements: In a trend’s zig-zag movements, zig-zag movements are longer in one direction, thereby pushing the trend in one direction. Each shorter movement usually takes the market back to 40 to 60 percent of the previous longer movement. With percentage retracements, you can estimte the length of these shorter movements, thereby gaining the ability to invest in high / low options or one touch options.
  • Trading the gap: Sometimes, the market jumps from one price level to the next and leaves a gap between the two price levels. These gaps can tell you a lot about the market and allow you to invest in a binary option.
  • Trading technical indicators: Technical indicators aggregate market data and display it in a way that allows you to make a prediction that you can trade with binary options. Technical analysis is probably the easiest way to generate signals, thereby making it the ideal way to generate signals for new traders.

  • Trading candlestick formations: Candlestick formations are almost as easy to understand as technical indicators and allow similar deep insights into the market. Recognizing certain candlestick formations and investing based on the predictions they allow can make you a lot of money.
  • A combination of the techniques mentioned above: Combining multiple techniques to create a signal will help you to create a better signal but also reduce the number of signals you can create. The trick here is to find a good mix of quality and quantity, but in most cases it makes sense to use more than one of the binary options strategies that we mentioned above to create a signal.

2. Money management strategy

A good money management strategy is just as important to your success as a good trading strategy. While a trading strategy can help you win a high percentage of your trades, you will never win all of your trades. Even with a good strategy, you will win only about 70 percent of your trades. This is easily enough to make you money with binary options, but you also need to account for the 30 percent of trades that you will lose with such a strategy.

If you accept the premise that you will inevitably lose some trades with binary options, you also have to accept that these losses will sometimes come in a row. By the sheer power of the odds, you will sooner or later lose 5 trades in a row, or even 10 or 15 trades. A money management strategy will help you to survive such a losing streak without going broke.

Read more about money management here.

Basing your strategy on signals

First things first, despite of what you might have heard signals do not replace the need for learning the various binary options strategies we outlined above in point 1. You cannot simply trade on signals and forget everything else. The best strategy is one where you understand the market yourself, and assess the signals you obtain to see if you think they are reliable.

Also, you most certainly will need a money management strategy even if you trade on signals. Even if you should attain a higher win percentage by using signals, this does not in any way negate the importance of managing your money wisely.

So, what are signals, then? And how can you use them? Let’s answer the first of these questions first. A binary signal is:

  • A recommended trade
  • It is generated using software systems that process huge amount of market data
  • It is based on specific algorithms that identify promising trades
  • It contains all the information you require to act on the recommendation

This means that software programs and powerful computers do the most difficult part of being a binary trader for you. All the number crunching and reading of charts is taken care of. However, as we pointed out already: the best signal-based strategy is one where you assess signals based on your own knowledge and act on the ones you trust the most.

How to use signals in you binary strategy?

Signals are sold to traders by companies called binary signal providers. You will find links to a lot of very good ones here on our site. We have provided you with reviews that will enable you to assess each one, and choose the one that fits best with your needs.

Signal providers are not all the same, but in general this is how they operate:

  • You sign up as a subscriber via the signal provider’s website
  • In return for a monthly fee (usually around $100) you gain access to their signals
  • Subscribers receive signals via email, sometimes other platforms such as SMS
  • The amount of signals they generate vary, as do the assets they follow
  • When you receive a signal you would like to act on, simply log into your broker and execute the recommended trade

As you can see, it is very easy to trade with a signals based binary strategy. Good binary signal providers will have a strike rate of 70 % or more. This means that if you currently win fewer than 7 out of 10 trades, using signals ought to improve your performance and your profits.

To get a complete overview of our articles on binary options strategies, take a look at the right side of your screen. For further reading on the subject, we recommend you to read more about professional traders advice on winning strategies for binary options on Binaryoptionsstrategy.net.

We wish you a successful trading career!

Binary Options Strategies
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