The Best Trading Strategies in Binary Options.
Strategy is one strong pole upon which the success of any binary options investment stands. Without a good strategy to rely on, a binary options trader becomes a street punter or a gambler. A binary options strategy is your autopilot to successful trades if you follow the rules. But if you don’t follow the rules, be ready to count your streak of losses.
Any binary options strategy must be breakable into these three sub classes; the trading strategy, the money management strategy and the analysis and improvement strategy. If the strategy you rely on cannot be sub-divided into these three, it cannot be qualified as a strategy.
No single strategy is the best. None can guarantee you 100% profit every time you trade. What these strategies we will analyze can do is yield 80%-90% profit most times. That’s if you let your trading be guided by their rules and procedures.
Strategies can be categorized into two; betting model-based strategies and market behavior strategies. Betting model strategies assumes that any investor will utilize betting strategies, regardless of their knowledge of the financial market. This form heavily relies on mediums that increase the chances of winning. Trading based on news is a good example.
On the other hand, market behavior strategies are built mainly on available, researched and investigated technical and statistical data. Even though these strategies are difficult to understand and time-consuming, it is the best means of succeeding in binary options. They are reliable since it is based on data charts and graphs. No matter your level of experience trading binary options, several means of understanding the techniques and charts are available.
Having understood the categories under which every other trading groups fall under, the following are considered to be the best based on their precision, reliability, and consistency.
Technical Analysis Strategy: This is a popular strategy among traders. It is a market behavior strategy that looks into the past of an asset to predict the future value of such asset. Technical analysis does not consider the intrinsic aspect of an asset or consider the financial statement of the company that owns the asset. Rather, it makes it submission using different parameters such as the Bollinger Band and the Moving Average.
Fundamental Analysis Strategy: Unlike technical analysis strategy, fundamental strategy focuses on external factors that influence the price of an asset. These can be anything from geopolitical concerns, the weather or the economic health of a country. Algorithmic and Signals: This is relying on the data and suggestion of algorithm and signals generated by applications. There are numerous apps sold to gather data and analyze the data for your use. You install the app on your PC or Smartphone; it collects data and processes the available data. The app selects the best possible trade for you relying on the analyzed data. Regularly update of the raw data is needed for it to function efficiently. The beauty of this strategy is the combination of technical and fundamental strategy to pick the best possible options.
Basic Options Strategy: this is also a popular one among traders, favorite due to its dual operations and tactics. The strategy protects traders from incurring series of losses and adopts a safeguard. This strategy trades both CALL and PUT option on every asset. It is impossible to lose on both positions bringing in either a minimal profit or loss.
Co-Integration Trading Strategy: The utilization of this strategy is best for two assets that are highly correlated. Both assets are in the same industry and shares same behavior. The two assets may even be complements to each other, thereby sharing related trading character. As a result of the correlation between the two assets, any gap between them usually closes at short notice; the difference is usually as a consequence of the temporary weakening of one asset. The primary task is identifying this difference as often as possible. After identification of the gap, a CALL option should be placed on the weak asset, if the asset price is higher and will soon decrease. In the end, the two assets will return to their correlative paths, and hats your point of exit.
Strategies are numerous. Trying out different ones could provide you with the best overall strategy that suits you. As you become more experienced as a Binary options trader, you can redesign and tweak your strategy per your successes or failures