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Binary Options Strategy Types and Rules

In-depth Information about Binary Options Strategies

QUICK INFO: Learn more about best binary options trading strategies and systems. Find out what is a binary options strategy and what rules and conditions you should follow for profitable binary options trading.

 

What is a Binary Options Trading Strategy

Binary options strategy is a predefined set of rules about when and how to make the trades (trading system) and how to invest into these trades (money management system). Many traders trade based more on their own 'feeling', and do not follow the predefined rules or exact systems, but they adjust their strategy from trade to trade. They make each investment based on different rules or indicators. There is nothing wrong with this type of trading if it is utilized by experienced trader. However, for beginner traders it is strongly advised to learn at least one of the binary options trading systems and try to understand it and follow the set of trading rules. As each trading strategy is built upon different foundation, by testing and trading different strategies, a trader will learn to recognize many different market conditions and with deeper and more profound understanding of the market each strategy can be additionally tweaked and personalized to suit each trader's style of trading and investment.

 

Types of Binary Options Strategies

Binary options strategies can be categorized by specific criteria. A strategy can be understood as a general category around which a specific trading system is built. Understanding binary options strategies in this manner allows us to split the strategies into four main groups, each of them offering the possibility to implement almost infinite number of trading systems.

 

Technical Analysis Trading Strategy

Strategies based on analysis of technical forex charts and stock market graphs

Technical Analysis StrategyTechnical Analysis is the type of trading in which you use the analysis of historical stock market chart movements to predict the future trends for the traded assets.

When trading with technical analysis you use live forex charts or stock market graphs and technical indicators to determine your trades. There are many systems of trading with technical analysis. Some are very simple and easy to understand, others are a bit more complex and require advanced understanding of trading indicators. When you learn how a few simple trading systems work and you understand the basics of simple trading indicators you are on a good way to develop your own trading systems. If you implement a good money management strategy and trading discipline, you can make profit even with a simple technical analysis trading system. With technical analysis you can trade different systems suitable for different types of markets. You can make just a few trades per day or you can make many. With technical analysis you can develop your own profitable trading style. If you learn how to use the technical analysis indicators and charts, you will be forever independent in your trading and you will be able to trade at any time you want. Learning the basics of technical analysis trading is highly recommended for anyone who wants to become a serious independent trader.

 

Fundamental Analysis Trading Strategy

Strategies based on analysis of market conditions, predictions, news and technical forecasts

Fundamental Analysis StrategyFundamental Analysis is the type of trading where you use the detailed short and long-term analysis and take into account the impact of economic news to predict the future trends for the traded assets.

Trading based on fundamental analysis is the type of trading where you use the information of business news and economic forecasts together with predicted daily support and resistance levels to determine the movements of stock market and forex charts. You can trade stocks - like google, facebook, amazon, apple etc., commodities like gold or oil or you can trade currencies of which the EUR/USD is the most traded currency pair. You can find the predictions of stock market movements on various specialized websites or you can research the companies or other assets which you trade by yourself. If you know, for example that apple is going to start the new iphone sales and you can predict that apple stocks will rise, you simply enter the trade which follows the trend and take the profit. There are quite a few good websites that offer free fundamental analysis information. You can get daily analysis for the most traded currencies, commodities and indices.

 

News Trading Strategy

Strategies based on analysis of economic and business news forecasts and monitoring news releases

News Trading StrategyNews trading is the type of trading where you use the economic and business forecasts to predict the future trends for the traded assets.

Every day a lot of economic predictions and news releases are published and many speculative traders are buying and selling the underlying assets based on the news predictions. For example, if the statistical news about US unemployment rate is predicted to show results that there is less unemployment as compared with previous analysis period, many traders will buy the USD, since lower unemployment rate is good for the national currency. Consequentially the impact will reflect on EUR/USD pair and as the USD will go stronger, the EUR/USD forex chart will go down. This is an opportunity for binary options traders to take the speculative trade prior the news release, based on the prediction, or they can wait for the actual release and try to catch the developing trend, as many traders will still buy the USD after the release, if the has been positive and good for US economy.

 

Signal Trading Strategy

Strategies based on Trading signals from various trading signal services

Signals Trading StrategySignal trading is a favorite type of trading for beginners. You simply subscribe to trading signal service and you make the trades according to the signals they send.

Beginners who find the technical analysis or economic forecasts to complicated but still want to make profit often use signal based trading. This is the easiest type of trading where no experience or additional education is needed. However there are many possibilities of additional system development with additional filtering of the signals. There are many possibilities how to use binary options signals as there are numerous signal providers that offer different types of signals. You can receive the trading signals by sms or e-mail and enter the trades based on the exact instructions on what asset to trade at what level and when to set the expiry time. Some signals are based on algorithmic calculations, others are provided by experienced traders. You can also follow live trading of professional traders and copy their trades on your own account. Each signal service has its own system of use and profitability statistics. There are many providers to choose from, so you can easily find a signal based system that suits your own needs and profit goals. If you just follow the signal service instructions you don't have to know anything about trading to be able to make profit.

 

Binary Options Trading Systems

Inside the categorization of trading strategies the systems can be understood as a complete set of rules and conditions specific for each strategy.

For example a system for technical analysis can be based upon:

- Type of asset you are trading (currencies, commodities, indices, stocks)
- Set of indicators and rules about how to use them to determine your entry and exit positions.
- Type of market in which you are trading (ranging, trending).
- Type of situations you are searching for (reversals - against the trend, breakouts - in the trend, following the trend, etc ...)
- Expiry times (Short Term - 1 to 5 minutes, Mid Term - 5 - 30 minutes, Intraday Trading - few trades per day with custom expiry times, End of Day Trading with expiry times at end of day, etc ...)
- Types of trades (Short Term, High/Low, Touch/No Touch, Boundary, etc ...)
- Money management system (How many % of total account balance you enter per trade, do you use martingale scale or any other scale or system of investments, etc ...)
- Etc ...

 

Best Binary Options Strategy

Traders are often looking for the 'best binary options strategy'. It is hard to highlight a single trading strategy as the best one, but there are many highly successful strategies, and the best one is always the one that each individual trader finds to suit his trading style, produces stable results and long-term profitability.

Each trading strategy or system can be built upon a few or more of previously listed factors. A successful system should not be too rigid and strict, but should also not be to 'loose'. A good system should always allow a certain degree of flexibility which allows you to adjust it to slightly different market conditions. Even in case of very rigid and strict systems, each trader in practice usually finds his own way of trading it. You should always look for developing your own trading style - if you always just follow some other trader's rules without understanding them, there is a big chance that a system which works for one trader won't work for you. The key to success is always understanding and implementing your own experience and building upon the knowledge you already have.

 

Related Videos:

If you are new to trading or if you are simply looking for new concepts, strategies or systems to test or trade, you can look into some of the successful binary options strategies presented on this website. 5 Minute Trading Strategy is a very simple but highly effective technical analysis trading system, easily understandable for beginners. Algobit Trading Strategy is a system that uses a free signal service with additional trade confirmations and there is no need to use the technical analysis or Forex charts to trade this simple system. Auto Binary Signals Strategy uses the algorithmic signals provided by ABS service to determine the trend breakouts and with additional chart confirmation it is easy to find profitable entry positions for binary options trading.

Also, there is a lot more information on this website, connected with binary options trading and strategies, so it is advised to browse trough the site and combine the info from different videos and articles to be able to develop your own trading strategies and systems.

 
 

 

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