Trading binary options for the most part is not very different from the traditional trading currency on the forex market. From an operational point of view, everything is simple, you either sell (put), or buy (call) option on a particular asset, such as a currency pair EUR/USD, and the outcome is determined by the option's expiration time. In the case of binary options no matter how far and how many points was the price of the selected asset, it's important only to find - above or below a certain level. The similarity of the principles of trade makes trading strategies for binary options similar to the strategies in the forex market.
So how to trade binary options, it's important to the future position of the price, very popular trend indicators and oscillators. Let's look at trading binary options strategies for using them.
The strategy of "Two Stochastic" makes it quite likely determine the start of upward or downward movement of prices. Indicator values are set as follows - for the first 21, 9, 9, 9 for second - 3, 3. As you can see one another fast Slow Stochastic. First of all, we pay attention to the signals of the slow stochastic - it shows us the general direction of the market, so we will be open only in the direction of motion of the slow stochastic. Fast Stochastic gives signals directly to the input of a deal, but these signals will be filtered out. If the Slow Stochastic indicates a declining trend, the trader should take into account only sell signals, and vice versa, with growth slow stochastic signals are taken into account only to the purchase. The figure indicated in detail the process of selecting signals.
Trading strategies for binary options are also using trend indicators, such as Moving Average. This indicator allows you to determine the direction of the trend, a trader can only take options with the general direction of movement. It's worth noting that the most profit with the least risk provides a medium-term options trading. Must be installed on schedule with a period of 90 MA. Next, estimate the price position relative to the indicator MA, the price is above MA-call option below - put option. With a large deviation from the MA line is better to refrain from the transaction, as there is a strong possibility at the beginning of rapprochement. The best time to buy or sell a stock option is the intersection of price and moving average.
As you can see, trading strategies for binary options are based on technical factors. Technical analysis of the simplest and most effective way of predicting future price movements. Therefore, use of, for example, resistance and support levels also true for binary options trading. Traders are also used Fibonacci levels, shapes, and other technical analysis indicators allowing to predict the price movement.
But do not discount the fundamental analysis, there are strategies for binary options based on the output of economic data. The gist of it's pretty simple, all you need is an economic calendar. Trader awaits the arrival of some news and tracks the currency pair, which will affect the output of the news. When it becomes known economic indicator, for example, the unemployment rate rose in the United States, the trader buys a put option on the U.S. dollar or the call option on the European currency. Of course, the U.S. dollar will remain under pressure due to negative news. The trader should select the important news that will have a long term effect to increase the chances of success, typically for economic news these calendars are marked in red, or exclamation mark.
Trading strategies for binary options have much in common with trading the foreign exchange market, so you can use the methods are the same. Strategy should be chosen depending on the style of your trade if you trade long-term, then pay attention to the fundamental data for the mid-term and short-term trading strategy would be the best choice with the use of technical tools. Source: Dewinforex