Secrets of binary options. How to strengthen your trading strategy?
There is no random price in the market. This pattern proves that binary options trading can be profitable. Naturally, provided that the trader acts systematically. Today we will look at several ways in which you can increase the accuracy of any earning strategy.
Perhaps not all of the proposed techniques will fit into your personal algorithm. However, the introduction of even one method can significantly affect the final result. So why don’t you give it a try?
Parameters of binary systems
If we analyze only the technical part, then each strategy is formed by the following elements:
- entry point;
- duration of waiting for the result (expiration);
- timeframe;
- asset;
- indicators and other graphical tools.
The set of these parameters in each binary strategy is different. Therefore, they can be supplemented and optimized.
Let’s take a closer look at exactly how this can be done.
Strengthening the entry point
Method No. 1
Determine if the price has a range in the predicted direction. To do this, it is enough to measure the distance between adjacent horizontal levels and assume whether it will be passed by the time of expiration.
If there is an obstacle in the way of the price, then in 80% of cases, instead of the expected breakdown, there will be a consolidation, correction or ragged movement. There are chances to work out the signal, however, given the urgent nature of options, in most cases transactions are closed negatively.
Method No. 2
Find the correlation between the selected assets and other instruments. For example, the relationship between the dollar and oil is reversed. This means that when some quotes grow, the second ones decrease.
The key advantage of this method is that the correlation is often worked out with a time delay. In practice, this can be used like this:
- you define an entry point (for example, you are going to buy an option for the euro/dollar pair);
- check oil quotes (for example, Brent);
- Suppose you notice a sharp drop;
- knowing about the inversely proportional relationship, we can assume that the dollar will strengthen and the euro/dollar chart will go down;
Conclusion: it is advisable to postpone the purchase of an option, since there is a high risk of correction caused by fundamental circumstances.
Method No. 3
Check the Economic Calendar all the time. The release of any unpredictable statistics immediately affects the market. Try to trade only at a time when at least an hour has passed before or after the publication of economic data.
Method No. 4
Track global trends. In particular, this applies to the daily timeframe. If you see that an upward movement begins on D1, act accordingly (forget about selling and only buy).
To adhere to this rule, it is sometimes necessary to reduce the number of occurrences. This is normal, so consciously use this measure, because It significantly increases the percentage of profitable trades.
Tip: if you are just starting to trade and are still poorly versed in the fundamental points of technical analysis, focus on prepared signals.
Method No. 5
Enter the position on the principle of pending orders. This is beneficial for the following reasons:
transactions are carried out at better prices;
the trader does not depend on the duration of the market pullback or consolidation;
By the time the price approaches the desired level, the situation may change. Consequently, the user will have time to adjust their actions.
Principle of operation and differences of existing pending orders
Since it will not be possible to automatically set pending orders in the binary market, all calculations will have to be carried out manually. Write down on paper the levels at which the orders should stand and after they are reached, act according to the plan. Perhaps this is the only drawback of this tool for a trader who trades binary options.
Theory of effective expiration
When trading binary options, it is not enough just to correctly predict the direction of an asset. It is necessary to wait for it to be overcome by a clearly fixed date.
Accordingly, the lower the expiration, the more difficult it is to predict the dynamics of the selected asset. As a result of continuous observations, the minimum time required to recruit a position was derived.
Timeframe Expiration
- M 1 from 5 minutes
- M 5 from 30 minutes
- M 15 from 60 minutes
- M 30 from 2.5 hours
- H 1 from 6 hours
- H 4 from 12 hours
Higher timeframes are traded exclusively according to the terms that are prescribed in the trading algorithms of the system.
All figures are conditional and may vary depending on the individual characteristics of the chosen earning strategy.
Timeframe selection
The lower the interval, the more difficult it is to make a prediction. Hence form your own idea of how to trade options. The only recommendation here will be addressed to beginners: do not grind and work in the range of M 15 – H 4.
Estimate the number of assets involved
There is one simple rule here: if necessary, the trader must simultaneously open trades on all traded instruments. Accordingly, the more aggressive the strategy, the less assets can be kept under control.
Remove unnecessary
We are talking about indicators and graphic elements. To determine the quality moment for entry, it is enough to get three to five independent signals. Try to stick to this amount. For example: a downtrend, a broken support line and a decreasing Stochastic direction indicate the sale of an option.
We can talk about options for strengthening the trading strategy for a long time. However, until you start acting, there will be no sense from this knowledge. I would like to dwell on the last nuance: always cooperate only with successful brokers whose reputation is time-tested. Here is a list of companies to target:
Friends, what secrets of binary options do you use? Don’t forget to share your experience in the comments.
Tagged with: Binary Options Academy
