Best Way to Trade Binary Options - Binary Options Trading Strategy

How to analyse binary options?

To get acceptable results from this investment, you must know the basics and have the right tools at your disposal. These options are not complicated and can yield an average return of 65 per cent. You must be familiar with the terminology, know how the trading system works and do basic or mathematical analysis. It's not an easy process, but a good broker platform can help you find the best way to trade binary options.

As with any money investing solution, it is vital to be realistic and to be prepared for the risks that may arise as a result of your decisions. Betting on binary options requires bidders to understand market conditions at the time of making the trades. If dealing solutions are based solely on enthusiasm, there is a chance of losing money. The trader should also be well versed in fundamental analysis and have a good knowledge of the base asset. This applies to all investments in commodities, stocks and currencies.

Binary options information
Binary options information

Fundamental analysis

This kind of analysis plays an especially important role in the lives of many traders. It helps to forecast global trends and identify factors which influence price movements in the medium term. With the advent and proliferation of binary options, people are trying to combine basic analysis with these short-term contracts. 

Fundamental analysis is based on real events, current economic conditions, political situation and also external factors that do not depend on human actions. For example, such factors can be natural phenomena like floods, tsunamis or earthquakes. These events can affect the price and general condition of national currencies or individual organizations.

The economic calendar for traders shows the summaries that can change the trend.

An important part of this analysis which is often used by bidders is the economic calendar. Its main purpose is to show the news statistics. Any trader can trade based on it. 

Technical analysis

A trader carries out specific analysis by observing the movement of an asset using indicators and charts to detect significant changes in chart formations, trend line patterns and resistance and support levels.

Technical analysis uses various charts, pivot point and resistance level indicators, volume indicators and other tools for analysis.

Popular indicators for chart analysis
Popular indicators for chart analysis

There are various technical analysis indicators available, including moving averages, RSI strength indices, MACD (Moving Average Convergence Divergence) and Bollinger Bands, etc. A good broker offers free indicators in his service, you can also configure the timeframe you want and open several indicators in one working screen. When choosing entry points, traders need to consider support and resistance levels, as well as the direction of trends.

Time frame trading in binary options

Which type of analysis should you choose? It all depends on the term for which you are buying the option. If all options available to bidders are divided into groups, taking the time to expiry as the difference factor, then we can get the following options:

  • Short term trades (turbo options). The group of short term options includes transactions with duration from 30 sec. to 5 min.;
  • Intraday transactions include all options that have more time to expiry than turbo options, but less than one day. They are called intraday transactions, but usually their upper limit is a few hours;
  • Medium and long term options.  The distinction between medium and long term trades is very fuzzy. Some brokers can offer you a term up to a year, but this is rare, and generally the maximum term the market uses is a few weeks.

If you opt for a long-term option, experienced traders will advise you to look not only at the charts, but also at the news analysis. So if you're betting on 1-minute turbo options, there's almost no point in analysing the news.

The ability to analyse options can be an effective tool for novice traders, but only as long as they know how to use it correctly. To best trade binary options, players must combine chart analysis with knowledge of the market itself. They must also be able to identify the strategies they will use. This can mean the difference between making a loss and a profit, which is what every successful trader wants.

Trading strategies

Dealers who have a clear binary options trading strategy and have clearly formulated their trading objectives are more successful in commerce. They use the right techniques to maximize the profits from their commerce activity.

Popular binary options trading methods
Popular binary options trading methods

The term "trading strategy" refers to a systematic method used by an experienced trader to determine which commerce options to use in a particular financial market.

News trading

Important news can be found on the broker's website, using the economic calendar. News trading is volatile, and it is best used when important news releases are expected. The decision should be made quickly, as major price movements usually take place immediately after the news release. You can open a deal based on a forecast. You can do it ten minutes before the news release, and you can buy an option with the expectation that it will not expire at the time of publication, but later, when the market reaction starts.

The second option is to buy after the macro numbers are released. This option is good, because you already know how the released data correlates to the forecasts and the previous value. In fact, you have all the data to open a smart position.

Martingale trading

Like any strategy, this method has its opponents and admirers. According to the simple variant of getting profit according to Martingale, it is necessary to increase the follow trade by some sum. The amount should be such an amount that would fully cover those previous trades that were closed with a negative index. You can check how the strategy will work on your demo account. This way, you will know if the strategy is suitable for you.

Scalping

Scalping is probably the most popular binary options trading strategy. It involves opening a short position and closing it before market conditions change. This strategy is best used when there are no large swings. This strategy works best with investments that are not risky. You should also be well-organized and act quickly.

Now, binary options scalping is a concept that combines a huge family of strategies, which have a second name of "pipsing". They are traded in small increments, or “pips”.

Trend trading

Trend bidders believe that the prices of currencies move in the same direction for a set period of time. They follow the rule: never go against the trend. 

There are two main types of trends: uptrends and downtrends.

  1. An uptrend is a series of increasing max and min values. All the following ones are above the previous ones.

  2. A descending trend is also a series of maxima and minima, but each successive value is lower than the preceding one.

In order to visualize these processes more clearly, they are marked schematically in the form of trend lines. The essence of the method is that if the trend is up trending, you bet on a rise (Call). If it's going down, it's the opposite.

However, a trend cannot last forever and many dealers counter-trend by trying to predict when the trend will reverse.  A counter-trend strategy is a technique which attempts to make a profit by playing against the current trend. Also, dealers refer to this practice as trading against the trend.

How to find the perfect technique to buy and sell binary options? Only experience will help you with this question.

Choose your binary options strategy
Choose your binary options strategy

You might hear a lot about a method and its success, but it might not work for you. Everybody, because of their personality, will perceive charts and read information differently. Some people only rely on graphical analysis. While technical indicators can be extremely helpful in spotting trends, they should not be relied upon. The best way to trade binary options is to practice and combine all types of analysis.

Best way to trade binary options in Nigeria

Thanks to the internet, many brokers now have virtual offices, and you can easily start trading options in Nigeria from the comfort of your home.  This is by far the most efficient method of commerce and will save you time and money.

If you do not have an account with an agent, you can create one right now, there is no cost, just a little of your time. You can register on the platform by entering your email, then wait for a confirmation email and follow the system's instructions. It 's easy.

Registering on the investing platform
Registering on the investing platform

Registering on the broker's website will allow you to take advantage of all the platform's features. Namely, video courses on various topics, mobile app, for more convenient trading, 24/7 service, analytical section, etc.

Demo account

As soon as you register, you can open a virtual account. Your equity will automatically be deposited on it. This is play money for your purchases. You cannot withdraw it from this account.  This will help you get familiar with the system and give you a better idea of how to place a trade. When you set up a demo account, you can experiment with different methods and find out which binary options trading strategy is best for you. This will allow you to decide whether you want to trade options and which term is best for you.

A demo account will give you an idea of how the trading process works and help you get a feel for how the system works in general.

Select the type of account for work
Select the type of account for work

Real trading account

You'll need to open a real account when you want to trade for real with your money. If this is the case, make a deposit and select an asset. Experienced dealers will advise you to start with small amounts and then build up your capital little by little. All profits will be credited to your brokerage account, and you will then be able to withdraw your money wherever you wish.

Also, the name of the account, you will be able to use the leverage if needed. This comes in handy when you don't have enough equity for a trade.

As with other forms of commerce, a great advantage to trading is the discipline and patience required to execute your plan.

You will spend a lot of time studying market trends and ways to make the most of your available positions and time. There are many books, websites and articles that can help you learn more about binary options and how to develop a profitable tactics.

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