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  1. #1
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    Ideas for trading with binary options

    How to create profitable trading method for binary options?

    First of all, we have to know parameters of our strategy – they should correspond to opportunities that binary option can give.

    Profilt/loss ratio

    As you understand – we have to have higher quantity of profitable trades to at least cover our costs. So, we should have strategy that would generate large quantity of winning outcomes – it should not be necessarily big moves, just small deviations in our favor.

    Trading hypothesis:

    To formulate rules for robust trading strategy, we have to formulate trading idea that would benefit from certain market conditions observed on a daily basis. Also, this idea has to be pretty simple to execute.

    If we look at distribution of daily price action on, say, popular currency pair EURUSD, we would notice that rotation of the price occurs when price returns to average sessional price, that can be easily found with EMA indicator. For example, on 5-minute chart of EURUSD, decision making points look like shown below:

    Attachment 11609

    I have to mention that day was pretty volatile – in many cases there would be much more decision making points, especially if price would trade within consolidation area.

    For sixty-second options, it’s possible to build simple scalping strategy that would be impossible to execute in conventional forex trading. If price touches 21-period EMA, we might observe at least slight pullback within next 2-3 minutes (price holds above EMA). Therefore, our trigger for entering long trade (buying «call» option) is a moment when price touches 21-period EMA from above (we can buy «put» option when price touches it from below).

    Attachment 11610

    We are talking about small pullback that does not exceed 5-10 pips, it can be 3-4 pips in most cases. So, it is considered as a «noise» for many intraday traders. In fact, if you target is 5 pips per trade, it would be tough to trade – first you have to cover your spread, then capture 2-3 pips and go away- even 1/1 profit/loss ratio can not be easily achieved in such type of trading. It does not make sense in traditional trading.

    But for binary options, it can bring some profit. You have to have at least 1 pip above strike price to realize profitable scenario – you get guaranteed 70% per bet. As you understand, it can not be achieved in traditional trading.

    But of course, we should not only find profitable pattern, but rather know – what market conditions are risky for our strategy? In other words, we have to know when price moves through moving average without any pullbacks.

    For example, it occurs after important news announcements. Below is a chart of GBPUSD after news announcement:

    Attachment 11611

    Therefore, you have to know periods within a day when you are not trading.

    Also, after elongated consolidation areas market can become extremely volatile – you have to take such periods to consideration as well. The more elongated such period was, the more volatile price action will be – also it means risk for such type of scalping strategy:

    Sometimes, period of reduced volatility pre-defines good trending move, we can use pullbacks to open positions in the direction of the trend.
    This example shows that you can build a trading strategy on short-term options (120 seconds). Also, you can use higher timeframes for your strategies using long term options with other expiration dates.

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    Last edited by Value trader; 09-03-2014 at 03:08 PM.

  2. #91
    Registered user Azis Muslim's Avatar
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    Quote Originally Posted by davido View Post
    Right now I don't have that chance to learn about the binary option, am only interested in learning about the forex market am not interested in binary option but in the future definitely I will trade binary but that's when I have develop enough experience in the forex market because that can also help in binary too, right now I want to learn about forex get enough know and become successful before thinking about binary option.
    Read some of your opinions back then and I understand it well now sir that you are not going to trade with binary in the time. But if you know some promotions that offer free bonus, why don't you give it a try? Yet you do not have to focus on everything to it, just play the game and make some easy money there. It is good if we can win but it is not bad when we lose the bonus. At least, it is a free account but sometime we can be paid well too.

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  3. #92
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    trading of binary option is a good and quick way for making of profits but it needs good strategies for trading as this will make trading more profitable, the trader that knows how to trade binary option good will be able to make good money with it and it may be better than the conventional trading, but the strategies f binary options are little and this may make trading with binary is little difficult.

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  4. #93
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    actually small amount are not suitable for binary option if you have enough money then you can't trade in binary option. because to win in this game you may need to play some trick and for this trick you have to enough blance otherwise you may lose.

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  5. #94
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    I have traded in Binary option trading for six months. I think this is like scalping. I did not make good profit in this option. But I gathered experience and finally I made a strategy which is similar like you. I just follow H1 candle and trade in 5 minutes and 1 minutes for "call " and "Put" option. If H1 candle is bull I just try call option. I am in 70% accuracy. Your strategy also nice. Thanks for sharing this post.

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  6. #95
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    Bibaryoptions trading is very good if you are good at predicting the market's direction.However it also require's our ability to be very patient in order to win certain trades,because in such cases after concludind on your daily tecnical analysis and fundamental as well,you'll find out that in order to have a 95 percent win of that trade,you are required to place a long time frame of say 10-24hours.I do that most of the time and i always win my trades.There's this saying that say's "the patient dog eat's the fatest bone".We all need to be patient to archieve success.

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    One good idea about trading successfully on binaryoptions,is the use of candlesticks.In this case you have to watchout for when a 5min candlesticks is forming for a bearish market.You now place a trade of say 1min with a minimal stake.I'v used this strategy and it works.But only when market is less busy and avoid a volatile currency pair.

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  7. #96
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    The forex market is a profitable business so also the binary option trading if we can develop the right basic before trading there is a chance for us to become successful trading either binary option or the forex market, but we must have good strategy and skills to trade and make money we must understand the movement of the market before we can do any of this business and succeed.

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