USDEUR Binary Options Strategy

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Binary Options Trading Strategies

Trading with Binary Options

Binary Options, known also as Digital Options or All-or-Nothing Options are not new financial instruments, but thanks to the new technologies, these are now available to the public and present an easier and faster way to make money.

The Digital option term derives from the digital nature of electronic devices which have only two states of being, “on” or “off” as with digital options trading.

When you hold a digital option, you are either in an ―On‖ state indication which means you are in the money or in an ―Off‖ state implying you are out of the money.

The value of the payout (Some brokers offer up To 85% return) is determined at the onset of the contract and does not depend on the magnitude by which the price of the underlying asset moves, so whether you are in the money by $0.01 or $0.05, the payout that you receive will be the same.

Binary Options are sometimes called all-or-nothing trades, meaning that either you are In-The-Money (ITM) and you get the specified payout, or you are Out-of-the-Money (OTM) and you lose your traded amount.

Binary options trading are a fast and exciting way to trade the financial markets. The payout rate trading digital options is high in comparison to any other traditional financial trading.

From the buyer’s perspective, the main advantage of binary options trading is that the Risk taken is limited to the premium that the trader pays up front to take on a binary option position. So in above example, the Risk taken by the trader is limited to $100 in that particular position.

This benefit means that the binary options trader can feel secure in knowing that their downside is limited to their initial trade size. While they can still profit if their market view turns out to be correct, they avoid having to worry about stop loss order slippage or losing their trading discipline.

Furthermore, binary options are a simpler trading vehicle having a limited risk profile since they either pay off a fixed amount or they do not, depending on where the underlying instrument is trading at the binary option’s expiration.

Another advantage is that binaries can often be traded for shorter time frames (1 hour, ½ hour or even 15 min) via binary options trading platforms then are typically available for normal options offered by exchanges.

Several types of Binary Options can now be traded online using a variety of binary options trading strategies.

High/Low: The most commonly available binary options are “High/Low” also known as “Above” and “Below” or “Call/Put” binary options. Basically, a trader will receive a payout on a long binary option if the market is higher than the strike price of an above binary at expiration, or under the strike of a below binary.

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Fr om the buyer’s perspective, the main advantage of binary options trading is that the Risk taken is limited to the premium that the trader pays up front to take on a binary option position. So in above example, the Risk taken by the trader is limited to $100 in that particular position.

This benefit means that the binary options trader can feel secure in knowing that their downside is limited to their initial trade size. While they can still profit if their market view turns out to be correct, they avoid having to worry about stop loss order slippage or losing their trading discipline.

Furthermore, binary options are a simpler trading vehicle having a limited risk profile since they either pay off a fixed amount or they do not, depending on where the underlying instrument is trading at the binary option’s expiration.

Another advantage is that binaries can often be traded for shorter time frames (1 hour, ½ hour or even 15 min) via binary options tradingplatforms then are typically available for normal options offered by exchanges.

Several types of Binary Optionscan now be traded online using a variety of binary options trading strategies.

High/Low:The most commonly available binary options are“High/Low”also known as“Above” and “Below”or“Call/Put”binary options. Basically, a trader will receive a payout on a long binary option if the market is higher than the strike price of an above binary at expiration, or under the strike of a below binary.

One Touch:Some online binary options trading platforms also offer“One Touch”above or below binary options that generate a payoff as soon as their trigger level trades in the underlying market… even before the expiration time.

Boundary:Another popular type of binary option is the“Range or Boundary”binary that is characterized by a range that is compared to the underlying market at the option’s expiration. Typically, an ―in‖ range binary pays off if the market ends up inside the range, while an ―out‖ range binary pays off if the market ends up outside the range.

Binary Options Minimum Risk High Profit Strategies

This is invincible… Its hard to lose with this strategy…

I am going to show you how to double your money every 10 days with MINIMUM RISK

Sounds too good to be true….

But if I rephrase the above sentence like “I am going to show you how to make 10% profit everyday”.

If you know about binary options and its potential, you’ll probably say “What the crap? I can make 70% profit in a single half hour trade in binary options”

If you can really make that kind of profit consistently, this is not for you.

But if you have been excited about making big money from binary options but have only faced the losses till now, your destiny is about to change.

The keyword here is “MINIMUM RISK”.

Every binary option product in the market will say “$500 in 60 seconds”, “$1500 in one day”, “$1000 in an hour”, but no one talks about the long term consistent money.

This is because no one can guarantee you a consistent profit. The reason is the risk associated with the binary options. This is where my strategy differs from the rest as it is designed for long term and consistent profits.

These days, everyone says that binary options is an easy form of trading… anyone can trade in binary options… you dont need to know the market basics to profit in binary options… I beg to differ.

Without the proper know how of the market and trading, you may win occasionally, but overall you will only face losses. Binary Options is not simply guessing, whether the market will be up or down after certain time. There are important questions which need to be asked and analyzed…

  • Up or down.
  • What’s the trend.
  • Are there chances of trend reversal.
  • What should be the expiry time.

You cannot just guess all these answers and expect to get all of them right at least 60% of the time. So this requires you to understand the market if you really have to profit consistently from binary options. And thus comes a huge risk for the trading virgins out there.

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So what should you expect from my strategy…

I am not going to teach you about the market basics and all that technical crap… although my strategy requires you to understand some of the basics.. some very minor ones, which you may already know.

I am going to show you a strategy which keeps the simplicity of binary options for newbies and simply reduces the chances of losses and hence reduces the risk. With my strategy, the probability of getting all the above questions answered correctly increases and you profit from most of your trades.

Let me get you a little more excited by showing you the money at stake. If you start from the initial investment of $100, here are the profit levels that you will reach:

  • After 10 days – $200
  • After 20 days – $400
  • After 30 days – $800
  • After 40 days – $1600
  • After 50 days – $3200
  • After 60 days – $6400

If you consider 20 trading days in a month, you will have $6400 after 3 months. And once you reach 5000 mark, you just have to double it every 10 days to make a handsome $10000 easily with very little work and with MINIMUM RISK.

All you will ever invest is $100. In fact, you can invest as little as $5 and keep doubling it every 10 days with my strategy.

So allow me to present to you my goldmine, my secret system, my strategy that will double your money every 10 days guaranteed.

Firstly, in order to use my system, you will have to open an account with binary.com. Binary.com, a company of Regent Markets, is a very old and highly respectable broker. It is important to open an account with Binary.com as they have a unique feature which allows you to select your own barrier and expiry time when trading Touch options and High/Low Options. The returns are adjusted based on the current market value, the selected barrier and the expiry time. This feature is not offered by any other broker and this is exactly the feature that we require for my strategy.

Another great feature offered by Binary.com is that they offer you to create a demo account without having to invest even a single penny. Once you are good to go, you can create a real account and deposit the real money. The minimum deposit amount is just 5$ and the minimum trade investment is just 1$.

Binary.com offer 4 types of trades:

  1. Rise/Fall: The usual binary option trades where you have to predict whether the market will be up or down from the current level at the expiry time.
  2. High/Low: This is similar to Rise/Fall Trades except you yourself get to select the barrier instead of the default current level. The return profit percentage is adjusted according to the selected barrier and expiry time.
  3. Touch/No Touch: Here, you have to predict whether the market will touch or not touch the selected barrier before the expiry time. Again, you yourself get to select the barrier. The return profit percentage is adjusted according to the selected barrier and expiry time.
  4. In/Out: This has 2 variations:
  • Stays Between/Goes Outside: Predict whether the market will remain between or go outside the selected Low and High Barriers before the expiry time.
  • End Between/Outside: Predict whether the market will be between or outside the selected Low and High Barriers at the expiry time.

For my strategy, I will be concentrating on Touch Options.

Binary.com has six type of assets – Forex, Stocks, Sectors, Commodities, Indices and Random Indices. Random Indices are their own version of indices based on randomly generated numbers. Although, they can be profitable and they are available 24 X 7, they are highly unpredictable and I don’t really prefer to use them for my strategy.

Touch Options are not available for Stocks and Sectors. For Indices, the minimum expiry time is 7 days, so not useful for my strategy.

For Commodities, the minimum expiry time for Touch options is 15 minutes. For Forex, the minimum expiry time varies from 15 minutes for some Forex pairs to 1 day for others. Expiry time of 1 day means that if I place a trade today, it will expire tomorrow at 23:59:59 GMT.

This is the reason why I prefer to trade with Forex because my strategy concentrates on daily targets.

Another important feature of Binary.com is the ability to Sell the trade prematurely. So if I have made a trade on EUR/USD with expiry time of 1 day, I will be able to Sell it before today end i.e. 23:59:59 GMT. The rate at which the trade is sold is displayed and keeps on changing according to the current state of the trade.

Learn the concept of matching trades… Click here to earn big from binary options without risk

With all that information, let me reveal my strategy.

As I said before my strategy works on daily target of 10%. If you have more time, you can go for 20% and if you want to be more cautious, you can go for 5%. (Read my last sentence very carefully, I’ll come back to it later)

So here’s my strategy for Touch options.

Touch Options

Go to Trade -> Touch/No Touch tab

You can select the market and it will show you the Current spot of that market. Then you can input a barrier and duration for which you want to place a trade. The payout refers to the total amount that you will receive along with the profit if you win the trade.

You can also see 2 trade options on the right. In the above example, in order to get a payout of 100$, you will have to buy the Touch trade at 61$ i.e. your trade investment. That means if EUR/USD touches 1.23746 before 1 day, you will make a net profit of 39$ i.e. 63.9% profit of your invested trade amount of 61$.

As you make the barrier closer to the current spot, the Return percentage for Touch option decreases. For No Touch options it goes over 500%, but that is not important to us.

You can also see the trend graph at the bottom of the page. You can select ticks, minutes, hours or days trend for the selected market. The below graph shows the hourly trend. You also have the option to see different chart types like line chart, dotted or as shown below candlestick chart.

Looking at the graph, it is easy to predict that it will touch the barrier of 1.2313 in not more than an hour or two from now. So if you invest 100$ in the Touch option right now, you will make around 5$ profit, absolutely risk free.

How to place and monitor your trade

Placing the trade in Binary.com is easy.

Once you have selected the market to trade on and the target barrier, just go to Trade –> Forex –> Touch/No Touch tab, select the market, input the barrier and duration (in our case, 1 day), select the Payout that you want from the trade (Investment + Profit). You will get two options on the right – one for buying touch option and other for No Touch option. Click on “PURCHASE” button of Touch option and that’s it.
Once you have made the trade, you can see it in your Portfolio.

You will see the Trade Details, your Purchase Price and the Indicative Price of your trade. Indicative Price is decided by the current state of your trade i.e. the time left and the closeness to the barrier among other factors.

If you click on View, you can see more details about your trade and can also get the “Sell At Market” option.

If you have made the trade of 1 day, the Sell button will remain active till the end of current day i.e. in above example, I made the trade on 13th February, so the Sell button will remain active till February 13, 23:59:59 GMT. Note that the trade of 1 day made on February 13 will expire on February 14 at 23:59:59 GMT.

For our strategy, we will never have to use the Sell button, but it is just nice to know that we have the option of selling our trade prematurely.

Once your Touch trade is successful, you can see the profit details in your Profit Table.

Also notice that the Sale Price is the Payout that we had selected. So that will make you a profit of $3.73, absolutely risk free.

The above trade took about 50 minutes to reach the target barrier. Normally, these trades may take about 2-3 hours to complete.

This is why I had said earlier that if you have more time, you can aim for a daily target of 20% as it will take 3-4 trades to earn 20% profit from such trades. Also, I had said that if you are more cautious, you can select just one perfect trade a day and earn 5-10% daily.

Making it INVINCIBLE

Let me take an example of EUR/USD. Go to investing.com. Investing.com is a definitive source for tools and information relating to the financial markets such as real-time quotes and streaming charts, up-to-date financial news, technical analysis, brokers directory & listings, an economic calendar, and tools & calculators. The site provides in-depth information on Currencies, Indices & Stocks, Futures and Options, Commodities, and Rates & Bonds.

Go to investing.com. You can see the complete technical analysis of all the major forex currency pairs on investing.com. Just select the currency pair in which you are looking to trade in.

Under the Technical tab, you can see the various Support and Resistance points for the currency for different time scales from 5 minutes to 1 day. Also, the overall Summary is given from “Strong Sell” to “Strong Buy”. You dont need to understand the technical details of Support and Resistance points for my strategy. Just need to know that all these figures together provide you the guarantee of a successful trade, but this is not important for us right now.

In the General tab, select Historical Data. Here, you can see the Open point, Closing point and High and Low values of EUR/USD currency pair for each day of the selected duration.

Select the data for duration of over 6 months and copy it in a spreadsheet. Now compare the Open time for each day with the highest point of the day. Do the same with the Lowest point of the day. The data that you get also include the Saturdays, so remove the Saturdays from the list as there is not much movement on Saturdays.

Now if you’ll see the two calculated values i.e. (Highest – Open Point) and (Open Point – Lowest Point) for each day, you’ll see that for about 75% of the days both the values are above 0.001 i.e. the market moved 10 pips from the Open point in both directions.

What it means is if you make a trade right at the start of the day i.e. with Open point as the current point, there is 75% chance that you will win the trade even if you have made the trade with your eyes closed.

Now, if you look for the days when the market has not moved more than 10 pips in either direction, you won’t find any such day.

So we are left with the days when the market has moved very less i.e. less than 10 pips in one direction. For these days, just looking at the trend line will tell you about the trading direction. So this makes your trade 100% secure if you make a trade close to the Opening time of the day i.e. 00:00 GMT.

I haven’t touched any technical aspects of Binary Options till now. I haven’t asked you to do any sort of data analysis before placing a trade, apart from just looking at the trend. I have just introduced you to investing.com and given you the hint that I am going to use the data from investing.com for my strategy.

But still, using only the knowledge that you have till now, you can start trading. Just open an account with binary.com and make a trade on EUR/USD using the above mentioned guidelines and timelines. Just give it a try for 5 days. You can use a virtual money account for now.

Please do let me know whether you succeeded or failed.

Covering up all bases

In order to reduce the maximum possible risk, some level of analysis is required before placing a trade. And there comes my MAGIC STEP.

THE MAGIC STEP

There are 2 things which you should consider when choosing your trade:

  1. A growing trend
  2. A strong indicator

If you kept waiting for some hard hitting trend to make a trade you’ll not be able to make any profit. You don’t even need a strong trend for this strategy. You just need a subtle trend.

More than a strong trend, you need a strong indicator. Indicators are available on investing.com. As I mentioned before, the Support and Resistance points, the Strong Sell to Strong Buy indicators, all these figures together provide you the guarantee of a successful trade.

So all the data, facts and figures are right in front of you. You just need to put it together to achieve profits every time you trade. For the people, who are scared of so many numbers, my MAGIC STEP is just for you. It does not involve any in-depth analysis of all the numbers and facts and figures. It just involves certain rules which can be understood with just one look at the screenshot I had given before.

My MAGIC STEP makes it all so easy for you. There is no technical expertise required in order to understand my MAGIC STEP, even a complete novice can understand it. Its just a set of rules that you should follow before placing a trade.

…and it comes to you for just $10.

This magic step really makes each and every trade of yours invincible. I guarantee, that you will be able to recover your $10 in 1 day.

Although my strategy itself is very low risk, but this step removes even further elements of risk. This Complete Money Making Guide educates you about:

  • The MAGIC STEP – a set of rules that you should follow before placing any trade
  • How to find the target point of your Touch Option trade
  • How to monitor your trade in detail
  • A strategy that makes your trade end successfully and quickly
  • Making it invincible strategy in detail

However, you can easily and safely use my above described strategy even if you decide not to buy my Binary Options Strategy – The Complete Money Making Guide.

Binary options strategies

A binary options trader is only as good as the strategy he follows. Finding a strategy that works, and fine-tuning it as you go, will focus your trading, build discipline and help ensure that you win more often than you lose.

In this lesson we will introduce you to three of the most popular and potentially rewarding binary options trading strategies.

We will talk you through how and why they work as well as what kinds of assets, time frames and expirations to use. We’ll also provide you with a concrete trading example for each to show you what a trade looks like.

Strategy No. 1: Short-term Boundary In options before big news events

One way binary options can be used is to predict whether the price of an underlying asset will remain within a specified range for a certain period of time or break outside its boundaries. This approach is known as boundary trading, tunnel trading or range trading.

The strategy we will introduce you to now involves making a short-term bet that prices will remain inside a specified range during a time when you think markets will be quiet and asset prices will trade sideways – for example in the ‘quiet before the storm’ often experienced ahead of a major event or news announcement that the market is waiting for.

How it works

In the run-up to major events like the monthly publication of US Nonfarm Payroll figures, the Federal Reserve’s FOMC meetings and press conferences or interest-rate decisions by central banks, many traders choose to keep out of markets, either because they are nervous of the volatility the event will trigger or are waiting to place trades on its outcome.

This often creates a lull in activity and creates a small range of price action that binary options traders can take advantage of.

How to trade the strategy

  • First, choose an underlying asset to trade. Currencies tend to work best with this strategy. It’s also possible with other assets like indices or stocks, in which case you might choose to trade in the run-up to company reports, for example.
  • Next, try and identify an upcoming event that you think will have a major impact on the underlying asset you have chosen. Our Economic Calendar outlines some of the biggest.
  • Double-check which other factors could also affect that market and make sure there isn’t another major new event happening at the same time. This could seriously blow your strategy off course.
  • If you are trading currencies, also remember that you are effectively trading two individual assets, each with a life of their own. So apply the step above to each currency in the pair you trade.
  • Look for confirmation that the asset is entering or looks likely to remain within a range and form a view on where you think the upper and lower boundaries of this range will lie. Technical analysis offers a number of patterns or indicators that will help. For example, Bollinger bands or the Moving Average Convergence Divergence (MACD) indicators can help you identify a range-bound market. The appearance of certain kinds of doji candlesticks meanwhile can indicate a trend is about to reverse or that volatility will pick up and the price will break its range, in which case it might be best to avoid this strategy and try another.
  • Next, identify the contract type that you will use. You’re looking for a ‘Boundary In’ option – also sometimes called an ‘In Range’ option – with a duration of no longer than 20 minutes and which will expire before the event starts. Not all brokers offer boundary options so make sure you’re using a company that does.
  • Price ranges for boundary trades are usually determined by the broker, but occasionally you can choose your own range – pick one strike price above the current price and one below. Make sure the range allows the price plenty of room to move within the anticipated boundaries you identified earlier – you want some leeway. Remember, the tighter the range, the higher the potential payout if you are proved correct, but also the higher the risk that your trade will fail.
  • Decide how much capital you want to risk on your trade. Our lesson on money management for binary options will help.

Example trade

US Nonfarm payroll figures are set to be announced in 30 minutes’ time. The EUR/USD currency pair will be very sensitive to the result and you notice that volatility is low. It’s currently trading at 1.11. Your binary options broker is offering Boundary In options on EUR/USD with a range of 1.109 and 1.113. You buy one that expires in 20 minutes. The market then moves sideways and your option expires with EUR/USD at 1.112 – comfortably inside the range. Your option pays out.

Strategy No. 2: Long-term High/Low options following surprise events

This is a long-term strategy in which you use High/Low options to predict whether an asset price will be higher or lower than a specified level within a pre-determined time period (usually a number of weeks).

It tends to work well following a major, unexpected news event that you think will have long-term repercussions. This could be a pioneering decision by a central bank, surprisingly good or bad corporate results or even a natural disaster.

How it works

When an important news event takes markets by surprise it can trigger some big price moves in underlying assets that are directly affected by the event. If the event looks likely to have a real, fundamental impact on assets that will last for some time it can trigger the start of a long-term price trend.

For example, if war broke out in a major oil-producing region and threatened a big chunk of global crude production, this would usually be positive for oil prices. While crude oil prices would probably jump straight after the news as the market priced in the shock, they may continue to rise – albeit more slowly and steadily – for several weeks as production was actually taken offline and the conflict perhaps even escalated.

Similarly, if the central bank of a major economy announced a big or unexpected interest-rate cut, the currency of that country could enter a prolonged downward trend.

Binary options traders can take advantage of these longer-term trends by forming a view on how far they think prices will rise or fall and how long the trend will continue. They can then use a High/Low option to bet that prices will be higher or lower than a certain point on expiry.

How to prep the strategy

  • Unlike Strategy 1, this isn’t a strategy where you can pick an event in advance and plan your trade around it. Rather, you have to act fast in the aftermath of an unexpected event.
  • Your first job therefore is to pick one or two underlying assets to specialise in and really get to understand them well. It can help to choose underlying assets that you have some special interest in. For example, if you have worked in a specific industry you might choose to trade shares of companies in that industry or one of the commodities it produces. If you have lived abroad or have family ties with a different country, you may have a more indepth understanding of what affects its currency.
  • Because this strategy is long term and involves a simple directional bet, a solid grounding in fundamental analysis is essential before you place your first trade. Apply fundamental analysis to the assets you have chosen to trade so that you understand in advance what are the biggest drivers behind its price, what other assets it is correlated to and what kind of events would be negative or positive for its price.
  • Some basic chart work is also essential. Dig out charts that show you how markets behaved following a range of major events in the past. Study what happened to the price of the asset you trade.
  • Before you place your first ‘real’ trade, it is also advisable to practise a few times with a demo account. Surprise events aren’t uncommon in financial markets, so simply wait for the next one and then place some dummy High/Low binary trades to experiment with the strategy. Even trending prices experience some volatility that could throw an otherwise winning trade out of the money if you don’t allow enough wiggle room for the price. Practice will help you learn how much to give.

How to trade the strategy

  • This strategy relies on a high degree of certainty that an event will create the directional move you are betting on. So as soon as an interesting event occurs, double-check that it is strongly correlated with the asset you trade and big enough to produce the long-term move you need.
  • Double-check also which other factors could affect the asset you will trade and make sure it isn’t simultaneously being impacted by another major news event or other head-winds.
  • Although fundamental analysis is your best friend with this strategy, you might also want to apply some technical analysis to confirm that a trend is underway before you enter your trade.
  • Next, identify the contract type you will use. You’re looking for a High binary option if you think the event will trigger an upward move or a Low binary option if you think it will trigger a downward move. Most brokers offer High/Low options.
  • Now choose the maturity and strike price you want. Your broker will probably determine for you which are available. This is a long-term strategy so go for an expiry of at least a week or two, making sure that the trend has time to develop but not leaving so much time that it fizzles out. As with Strategy 1, you also have to leave room for unexpected volatility that could knock an otherwise successful trade out of the money right at expiry. This is perhaps the hardest part of the strategy to master.
  • Decide how much capital you want to risk on your trade, remembering that the trade is generally higher risk – with a higher potential payout – the further the strike price from current prices. Our lesson on money management for binary options will help.

Example trade

Japan’s central bank makes a surprise announcement that it will act to weaken the yen in the long term, for example by selling the currency or lowering interest rates. You now try to identify a currency pair comprising the yen and another currency that is currently fairly strong. You opt for EUR/JPY and buy a High option that expires in three weeks. When the option expires three weeks later, the yen has weakened against the euro and your trade pays out.

Strategy No. 3: Short-term Breakout strategy using previous day’s highs and lows

With this strategy, we again use High/Low options. This time however we are betting that if an asset price breaks through its previous day’s high or low, the price will then experience a large short-term push in the same direction.

How it works

The strategy hinges on the concept of support and resistance. These are levels that, in the case of support, a price struggles to fall below or, in the case of resistance, it struggles to rise above.

Technical analysts have observed that when a price does breach either of these levels, it often suddenly picks up momentum and moves further and faster in the direction of the break.

This is usually because a lot of other traders – range traders in particular – use support and resistance levels to set stop losses so they can automatically exit trades as they move out of the money. A surge of fresh orders often also enters the market at this point, pushing the price further in the same direction.

Binary options can take advantage of this phenomenon by keeping track of the highest and lowest points a price reaches within a single day. The following day they then wait for it to touch these levels again.

If, for example, the price breaks through the previous day’s high (its resistance level), a binary options trader would buy a High option with a short maturity of typically five minutes to bet that the price will be higher when the option expires.

If the price breaches the previous day’s low (its support level), the trader would buy a Low option, again with a short maturity, to bet that the price will be lower when the option expires.

How to trade the strategy

  • First, choose an underlying asset to trade. Because this strategy depends on trading having paused overnight, avoid 24-hour markets like foreign exchange. Indices, shares or commodities tend to work well with this strategy.
  • Next, identify the previous day’s high and low. You don’t usually need any complex indicators for this – it should be clear from a simple price chart.
  • If prices have ‘gapped’ overnight and the opening price on the morning of the day you will trade has already broken through the previous day’s support or resistance levels, do not use this strategy.
  • This strategy relies on fast action, so prepare in advance what option you will use. It tends to work best with short time frames, so you want a short-term option with a five-minute expiry. Use a High option if the previous day’s High/Resistance level is breached, and a Low option if the Low/Support level is breached. If you use Japanese candlestick charts, it’s a good idea to wait for a second candle to form that confirms the breach and lets you know there is decent momentum forming.
  • As before, decide how much capital you want to risk on your trade. Our lesson on money management for binary options will help.

Example trade

Germany’s DAX30 index achieves a high of 10.800 and a low of 10.680 on Monday. On Tuesday morning at 10.30am, it breaks the 10.800 level and quotes at 10.803. You buy a short-term High option with a five-minute expiry.

At 10.35am, the DAX30 quotes at 10.823 and your option expires in the money.

Summary

So far you have learned that:

  • there are 3 common strategies to trade binary options: a short term ‘Boundary In’, a long-term, surprise event, and a short-term Breakout strategy that uses the previous day’s high and low
  • these strategies are based on real market dynamics and they repeat over again across different markets
  • you can apply any of these strategies with the right practice and preparation
Best Binary Options Brokers 2020:
  • BINARIUM
    BINARIUM

    Top Broker!
    Best Choice For Beginners!
    Free Trading Education!
    Free Demo Account!
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  • BINOMO
    BINOMO

    Perfect For Experienced Traders!

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How To Choose Binary Options Broker 2020
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