10 best Binary Options Strategies for beginners and professionals.
Trading Binary Options is now one of the most popular ways of having skin in the game. The appeal of binary options is not hard to recognize – at first blush, the transparent options look like a great way to make money fast.
But like any other way of making money, trading Binary Options is not that simple. You must take the time to learn or formulate and implement a solid trading strategy.
Any options trader worth their salt knows a couple of good trading strategies that can make them profits and get them out of sticky trading situations.
If you haven’t learned any strategies yet, don’t sign up for a broker and head into the market just yet. Slow down and invest some time into learning. There’s plenty of time for you to make money with binary options.
There is no shortage of nifty Binary Options strategies, either, and we’ve highlighted some of the best strategies for you in our guide below.
See an example here:
Binary Options trading strategy example.
Why should you use a trading strategy?
Regardless of what kind of derivative you’re trading and what market you’re trading it in, approaching a trade without having a plan of action is rash at best and dangerous at worst.
It is akin to giving someone your money without knowing what they’ll do with it. You must have an entry and exit plan and a set monetary goal – without these, you’re essentially relying on fate to make you money.
It is a traders’ job to use the tools available to them and make informed decisions. Good traders never treat a trade as a gamble.
Furthermore, using trading strategies ensures that you don’t make an emotional decision. Greed and fear are feelings that arise when you’re putting hard-earned money on the line, and with a strategy in place, you will never bet more than you can afford to lose.
If you’re trading Binary Options, it becomes even more important to use strategies. While the instrument is easy to trade with, you can still lose a lot of money if you make poor decisions or bet on the wrong options.
Find better decisions for your trades No emotional acting Using a
trading plan No gambling Know when the market is moving Profitable in long-term trading.
(Risk warning: Trading involves risks)
The basics of Binary Options strategies:
There are two parameters you need to know about: The signal and the trade amount.
The signal.
A signal is simply an indication of whether the underlying asset’s price will go up or down. Every strategy involves either creating or recognizing a signal, which you must use to decide whether you should buy or sell an option.
You can make a signal in two ways: by technical analyses or by following the news.
Approach 1: Following the news.
If you don’t have a lot of experience, you can follow the news and use news events as signals. Pay attention to all of the publicly available information – industry announcements and CEO decisions often accurately indicate whether an asset’s price will rise or fall.
Approach 2: Technical analysis.
Trading stocks and trading options are two very different things, but the two also have some similarities. You can use technical analysis for trading both stocks and options.
To put it briefly, technical analysis involves examining all the information relative to the asset without considering the broader market’s movements.
Technical analysis is discernibly more complicated than looking at news events – you will need to look at how an asset’s price has moved in the past to predict how it will move in the future.
Example for a technical analysis signal:
Buy signal with technical analysis.
Conducting technical analysis may seem extremely difficult to new traders, but you must realize that your brain looks for patterns in things every day. All you have to do is learn to use charting tools and understand a few concepts before getting accustomed to forming signals based on the information you collect.
All told, you must recognize what you’re more comfortable with to increase your chances of making profits. As a beginner learning technical analysis, you could benefit a whole lot by practicing strategies using dummy money with a demo account.
Many brokers offer demo accounts for free. Getting some practice and gaining some experience before investing real money into the market is the right way to go. Until then, use news sources to make money with binary options (more on that below).
The trade amount.
You must have an underlying money management strategy to determine how much you will trade regardless of your approach.
The two most common money management approaches traders use are the Martingale and the percentage-based approach.
Approach 1: Percentage-based.
Using the percentage-based approach to money management is your best course of action when you’re starting out. The method is a lot less risky since it determines how much you should invest in a trade based on how much you have in your account.
In this strategy, you must first reflect and come up with a percentage of your capital you’re willing to risk. Most traders bet 1% or 2%; however, more experienced traders may also choose to risk 5% of their capital.
Money management percent-based.
(Risk warning: Trading involves risks)
Once you decide how much you want to risk (we recommend 1%), you can go ahead and trade 1% of your capital on every trade. L et’s say you have $10,000 in your account. You can make a $100 trade if you’re applying this strategy.
If you lose money, the next time you make a trade, you will have less to invest since you will have less money in your account.
But this also means that you will have money in your account at all times, and you could bet more after each successful trade. The percentage-based approach helps ensure that you make profits consistently.
Approach 2: Martingale.
The Martingale approach will have you double the amount you’re trading after a loss, so you can recover from the loss and then some.
However, this approach could lead you to lose all of your money if you don’t have much experience and go on a losing streak.
How to tell if a Binary Options strategy is good:
A great binary options strategy will generate a signal that makes you money consistently.
Learning strategies, personalizing them, and testing them out is the only way to find a good strategy. Any trader worth their salt will tell you that the strategy you use will pave the way to your eventual success (or failure).
You must remember that some strategies yield outstanding results in the short term, and others make you great money in the long term. Recognizing which strategy is suitable for what circumstance is a part of being a good trader.
Every time you develop a new strategy or make changes to one you use, test it out.
Never risk real capital to test a strategy you don’t know works. Also, make sure you have a money management strategy to complement your signal.
Recommended brokers for using Binary Options strategies:
If you want to start trading Binary Options successfully, you will need a reliable broker. In the next section, we show your 10 different strategies. We recommend using the practice account first before you invest real money. The following 3 brokers a tested and checked by us:
Advantages:
1. IQ Option.
+ Best platform + Best support + Highest yield + Multiple payment options.
Live-account from $ 10.
(Risk warning: Your capital can be at risk)
+ New broker + Crypto payments + Bonuses + Accepts international clients.
Live-account from $ 10.
(Risk warning: Your capital can be at risk)
3. Pocket Option.
+ Accepts any clients + Bonus program + Social Trading + Accepts international clients.
Live-account from $ 50.
