Binary Options Strategies
A trading strategy is a certain sequence of actions of a trader, allowing him/her to achieve positive results. When looking for binary strategies, you’ll come across thousands of different approaches. Some of them are unknown, while others have been tested by many successful binary traders in South Africa and have been profitable. Before taking the plunge, many professionals study the market, and try out a few strategies to find the “golden egg.”
But the question is how to find the most effective binary options strategy?
Let’s find out the answer to this question. In any financial market, many experts follow the principle of predicting the direction of price changes with the minimum amount of risks. Experienced traders don’t use ready-made strategies. They create their own unique trading system, applying one or more simplified approach.
Combining them, and using several trading tools, they get a universal strategy that brings good profit. Well, you may be wondering, it’s simple. But it isn’t!
To determine the direction of the market, professional traders in their systems use a wide range of elements of technical and fundamental analysis.
Binary options traders sometimes have to sort out a dozen strategies to find their own. In this search, they look for several criteria. The strategy should correspond to the trader; it must be convenient, understandable, and give a good income. Here’s an example of an effective binary options strategy.
Many traders recognize five minutes of fortune as a simple, convenient, and effective strategy. The increased interest in it is associated with a high probability of winning, which exceeds 80%. Before applying, the trader must find an asset whose price is steadily moving in one direction, no matter up or down.
Having found an asset, a trader needs to acquire a suitable binary option and wait for the end of trading. The Five Minutes of Fortune trading strategy can be reused multiple times during the day.
This is one example of a binary options strategy. As we’ll move into this article, we’ll give several popular and effective binary options trading strategies. If you are just starting, its best to use a trading strategy that ensures the diversification of capital, as it increases the safety of the funds and the probability of winning. The most active trading strategies follow the principle of taking risks, but in less quantity. Complying it, an experienced trader in each transaction uses no more than 1/10 of his capital.
Best time to trade binary options in South Africa
There is a debate among South African traders, “what is the best time to trade binary options in South Africa?” The answer to this question lies in the concept of trading sessions.
Trading is done 24 hours a day, five days a week. As you know, the Earth is round, and this allows financial institutions on different continents to trade around the clock.
Thus, when traders in Australia go to bed, traders in Europe wake up. This is why many traders say that the market never sleeps. There are four trading sessions:
Many traders get confused that you can only trade forex binary options pairs at a certain time. Who said that during the American session, you would not have a good signal for binary options on EUR / JPY? It’s a hoax surrounding the binary options trading. It is worth mentioning that when considering time, we should also ponder on volatility. Volatility is the change in price per unit time. It has three types:
It is a time when the market is not suitable for trading. There is a conflict between buying and selling, and the market is in a downtrend. Low volatility is observed in the Pacific (11 pm to 8 am South African time) and Asian (1 am to 10 am) sessions. This is because the market does not have large volumes of money. Even though Chinese and Japanese markets are open in the Asian session, normal volatility begins to appear closer to the European session (9 am to 6 pm).
This is a time when the markets are neither going up nor down. They are in a balanced state. Such volatility appears during the trading sessions of Asia and Europe and Europe and America (2 pm to 11 pm) because markets of different continents are open at the same time.
High volatility occurs when important economic events and news about crises, wars, sanctions releases. Trading at such moments is not recommended, because the market behaves unpredictably and impulsively. Besides volatility, South African traders need to understand the concept of days of the week. Mondays and Fridays are not considered the best days for trading, as there is a chance of high volatility. So, Tuesdays, Wednesdays, and Thursdays are good options for South African traders.
If we summarize trading sessions, volatility, and days, there isn’t one particular time for binary options trading in South Africa. But we can advise to avoid low volatility, monitor the charts, and keep up with the news.
Binary trading strategies for beginners
We mentioned the Five Minutes of Fortune trading strategy earlier. It is a good strategy for all levels of traders. But many people are inquisitive about finding binary trading strategies for beginners.
As a beginner, you don’t want to complicate your trading. The simple approaches are the most effective. Here we’ll give you two of the best binary trading strategies that you can apply in your trading as a beginner.
- Three in a Row
The “Three in a row” strategy is based on the three most popular indicators; MA, Stochastic, and RSI. When used correctly, these indicators give a high percentage of correct and free binary trading signals for binary options and be excellent filters for each other.
Parameters of indicators
For MA, Stochastic, and RSI, the parameters should be:
- MA (5),
- MA (10),
- Stochastic (14, 3, 3),
- RSI (14).
The strategy is suitable for all timeframes. Naturally, the older we take the timeframe, the more accurate the result.
Signals for Three in a Row
Conditions for “call” option:
- MA 5 crosses MA 10 from bottom to top,
- RSI is inside channel 30-70,
- RSI above level 50,
- Stochastic lines are in channel 20-80,
- Stochastic lines are directed up
Conditions for “put” option:
- MA 5 crosses MA 10 from top to bottom,
- RSI is inside channel 70-30,
- RSI below level 50,
- Stochastic lines are in channel 80-20,
- Stochastic lines are directed down.
- Spring strategy
Spring is a reversal trading strategy, which means you have to go against the trend to get profits. For reversal binary trading South Africa strategies, it is important to choose the correct parameters of the indicators. Many people recommend the default settings for the indicators, but for Spring reversal, you need to change its settings to filter out the false signals.
The 3 indicators used in this strategy are:
- CCI (commodity channel index) with parameters 200 and -200
- Stochastic Oscillator with parameters 5.3.3.
- Bollinger bands with standard parameters.
Conditions for “call” option:
- CCI returns from zone -200
- The graph is below the lower Bollinger band
- Stochastic crosses in the oversold zone (below 20)
- Apply “call” 2 candles ahead
Condition for “put” option:
- CCI returns from zone 200
- The graph is above the upper Bollinger band
- Stochastic crosses overbought (above 80)
- Apply “put” 2 candles ahead
The timeframe for the binary options strategy for beginners “Spring” is starting from 5 minutes. The higher the time frame you choose, the more accurate signals for binary options you will receive. If you are familiar with trading charts, applying these strategies will be a walk in the park.
Binary options trading strategy
Binary options trading is all about profits. Each trader tries to enter the market to find profitable trades. But often, traders went into this fantasy world of profits. They don’t know how to find the right path for earnings. For profits, you need a solid binary options trading strategy. As we already mentioned in the previous section, strategies for beginners. Here we’ll discuss what the different types of strategies available for binary options are.
1. Trending strategies
Trending strategies are applied when there is a trend in the market (chart rises and falls for a long time). They are the most profitable and least risky. The most common trend strategies are:
- Three in a row
- Trend Control
- Triple Screen
2. Reversal strategies
Reversal strategies are used when the market is overcrowded by sellers or buyers (the price of an asset is very high or low). Reversal strategies often make a profit in situations where the chart is near strong support and resistance levels. Common reversal strategies are:
- Hubba Hubba’s style
3. Long term strategies
Long-term strategies are the most accurate and realistic strategies for binary options, as they are less susceptible to market noise (temporary minor price fluctuations). Long term strategies include:
- Three in a row
4. Short term strategies
Short-term strategies are for turbo options with expiration from 60 seconds to 5 minutes. To use these strategies, you need a lot of experience. Short-term involves a high degree of risk and high-profit due to a large number of transactions. Popular short term strategies are:
- Marathon or 60 seconds
- Hubba Hubba’s style
5. Drain strategies
This is another group of binary trading strategies that involve high-risk. Drain strategies work similarly to a casino. The idea is to generate profits one time for every losing trades. As the name suggests, drain strategies can drain your funds in no time. So, don’t try these strategies if you don’t know about them. A robust binary options strategy should not consist of indicators alone. To start earning stably, you must remember the following factors:
- Risk management
- Fundamental analysis (analysis of news, reports, fundamental factors of the economy)
- Price Action analysis (analysis of candlestick patterns and graphic patterns)
- Volume analysis (analysis of the behaviour of large players)
Combined with any of the strategies mentioned above, these factors can bring large profits in binary options trading.
Best binary options strategies that work
We gave a detailed review of the types of trading strategies in the previous section. Now let’s give you the best strategies that work.
1. Marathon or 60 seconds Strategy
60 seconds is a popular short-term trading strategy. The main idea of this strategy is to double your capital in 60 seconds. “Sounds too good to be true?” Believe it or not, this strategy works perfectly. To implement this strategy, you need two indictors; MA and MACD.
Open your MT4 platform and see the direction of any currency pair or an asset trend.
Marathon Strategy Signal for Put options:
- The chart below line MA 9,
- The intersection of two MACD lines from top to bottom.
Marathon Strategy Signal for call options:
- Chart above line MA 9,
- The intersection of two MACD lines from the bottom up.
To make sure that we have a trend, and not just normal market noise, we move the chart away and see how long this trend continued. Next, we impose MA 9 to track the trend. If the trend is growing, the chart should be above the MA line, i.e., higher than the average price in the last 9 minutes. If the trend falls, the chart should be below the MA line, i.e., lower than the average price in the last 9 minutes.
We will catch a specific point at the intersection of the MACD. You can look at the histogram and wait until it crosses the 0 marks. We prefer to bet on the intersection of the baseline with the signal line. Thus, we find the optimal entry point and comply with all the rules of trend trading. This is a simple yet effective trading strategy.
2. Trinity Strategy
The Trinity system is based on three indicators: RSI, MA, MACD. It is considered a proven binary options trading strategy. If you are a fan of trend trading, the trinity is your best bet. The parameters for indicators are:
- MA with a period of 10
- MACD with standard parameters
- RSI with standard parameters
To filter false signals, we use MA and MACD.
Trinity Strategy Signals for “call” option
- The RSI indicator crosses the line from the bottom with a mark of 50
- MACD lines intersect below 0
- The graph is above the MA line with a period of 10
- We buy a call option until the end of the candle
Trinity Strategy Signals for “put” option
- The RSI indicator crosses the line from top to bottom with a mark of 50
- MACD lines intersect above 0
- The graph is below the MA line with a period of 10
- We buy a put option until the end of the candle.
No doubt, the trinity system is a binary options trading strategy that works best. But we recommend you to try this strategy on the demo account.
When you look at the financial market and you have plans to participate and trade binary options, then it requires from traders to have enough trading knowledge to know how to use specific strategies when trading with a chosen trade option, short term or long term.
Traders can choose among many trading strategies, ranging from those that are mostly used by traders beginners or those that require certain trading skills and are intended for experienced traders.
In the industry of binary options, strategies are considered to be in the topmost important elements of binary options trading.
With well-chosen strategies, it is possible to maximize profit and achieve success, whether we are talking about short terms strategies or other types, offered on various trading platforms. We always advise our readers to evaluate many trading strategies and understand them in order to benefit from them in the trading process.