Binary Options Trading Strategies
Trending strategy
This is the standard technique that is widely applied by professional traders and newcomers. The technique may be also known as the bull bear methodology. In the focus of this strategy lie such processes as decline, rise, flat trending, and monitoring. In case the flat trending appears and the positive outcome of the prediction is expected, the option you have to put in action is the No Touch Option.
If an asset value is about to get higher, a “call” option has to be selected. In the opposite situation, a “put” option is usually traded.
The pattern of functioning is just the same for call/put trading, the only difference is that in this case the pricing point, which does not have to be reached, is predicted. For instance, if the shared price of Google firm equals $540 and the platform stands on a no touch value of $570. The return percentage, in this case, is 77%. In this case, the profit is derived if the value does not reach $570.
Pinocchio technique
The application of the Pinocchio strategy is possible in case the value is going to take the opposite direction either down or up. Call options have to be purchased if the price growth is predicted. In case a trader foresees a value downfall, put options are traded. In order to test the methodology, apply it on a demo version.
Straddle technique
The straddle strategy is typically employed if the market is characterized by high volatility, in case there is a professional prediction afloat or at the break of critical financial news. The strategy possesses an international recognition and is widely applied. With this methodology, one is not supposed to make a choice between call/put options but can put two of them on stake.
Within this strategy, one applies a “put” option under the condition of price increase and the expectation that the value is going to go down in the nearest time. At the moment of a decline, when there is a prediction for the price to change the direction again, a “call” option must be taken. One may consider trading on the opposite options. Specifically, a trader can consider applying call options to low-priced assets and put options to the high-priced ones. The usage of the technique may bring high profits, at least in one of trades since it is definitely going to impose an “in money” outcome for one of the options. The application of the method is typical for volatile assets and for the cases, in which a market down or up is.
Risk Reversal technique
The strategy is really one of the most popular binary trading techniques, which is applied by traders from the whole world. As the naming of the strategy reveals, it aims at the successful risk prevention and the enhancement of profitability level. The application of the strategy presupposes the placement of call/put options on a specific asset, at the same moment. The scheme brings maximal benefits in case the assets in question are volatile. Risk reversal method guarantees success at least in one of the placed predictions since binary option can presuppose only two possible results. Accordingly, trading on the opposites of two excludes the threat of losing on both.
Hedging technique
The hedging method may be also named pairing. It is widely applied in such domains as binary trading corporation work, as well as with stock areas and investors with the aim of benefit boosting and risk minimization. The sustention of the strategy runs according to the following scheme: a trader has to place put/call options at the same time on a chosen asset. Accordingly, no matter which pricing direction is going to be taken, a trader is guaranteed that some profits will be derived. In other words, a strategy brings a trader into an “in money” position. Due to it, by employing the strategy, a trader protects himself from potential risks and makes sure that his position in trading is safe.
Fundamental analysis
The strategy relates to the process of getting acquainted with an asset nature. Accordingly, it is generally applied in stock marketing. Indeed, if a trader understands the characteristics of a specific asset perfectly, he/she has more chances to make a correct prediction concerning its future pricing. Thus, the employment of the analysis demands to learn a company structure in depth, which means studying its firm statements and earning reports, as well as getting a good notion of the market share. If a detailed review is performed, a trader starts understanding the factors that influence pricing modifications. Due to it, an investor gets a chance to align the financial factors that impact an asset with the possible changes in future. You have to note that such procedures do not have to be passed in case you operate a reliable binary robot.
If you are interested in testing the strategies, open a demo account on one of the binary brokers.
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