binary options vs forex trading which is better
Today we are going to share our binary options trading strategy with you lot. This trading strategy is designed to assistance you identify whether you'll like trading binaries and teach you how to trade binary options the right way. If you prefer to play it safe over gambling, you'll need a trading strategy or tactic to help you master binary options and other trading activities. This is where our Trading Strategy Guides team comes to the rescue. Nosotros will provide you with the best binary options strategy.
Agreement how to trade options can help increment your performance as a trader. The primary reason nosotros're interested in learning near how to trade binary options is the fact that binaries simplify what we're already doing in Forex. At the aforementioned time, binary options too allow us to make more than coin in the process. We are besides controlling the risk.
Binary options are easy to empathize. This is coming from someone who has trivial or no experience in the surface area. If your favorite approach to trading forex is to jump in on a fast price movement and ride the intraday trend for as long equally the momentum lasts, you tin can learn how to make money trading binary options very quickly.
When nosotros start discovered binaries, the light bulb in our heads turned on. Nosotros figured out the aforementioned thing that we've been doing in Forex tin be done. Simply walk abroad with 75%, fifty-fifty 95% winning trades because we only needed to become the direction correct. No demand to worry most how many pips nosotros could grasp in the process.
And that, my friends, is the real beauty of binary options.
What are Binary Options?
Binary options trading is a grade of derivatives trading that has a fixed profit or loss. Trading binary options is elementary. All you need to practice is ask yourself a simple yep or no question. Will the price of the underlying asset be worth more than than the strike price at the expiration date?
Now, let's start past agreement how binary options piece of work.
Essentially, we can trade binary options for whatever blazon of instrument. Whether it be bolt (Gilded, Oil or Silverish), Forex exchange currencies (EUR/USD, GBP/USD or USD/JPY), or stocks (Amazon, Tesla or Twitter).
So, the first matter you need to decide upon is to select the asset to trade.
2nd, before submitting our trades, each of these instruments has a electric current value at any given indicate in fourth dimension. How to merchandise binary options depends on our trading skills. It is used to predict where the current value volition exist some fourth dimension in the future. In other words, we must use our skills to predict the market management. This will determine our success in trading binary options.
The market can merely become up or downwards. If we believe the electric current value will become up in the near future, and so we buy a Telephone call option. On the other paw, if we believe the current value volition become downwardly in the most hereafter, we buy a Put option. Read more well-nigh call options vs put options.
Third, we need to determine what the most critical aspect of trading binary options is. The expiration fourth dimension will ultimately make up one's mind if y'all're making a profit or not.
Trading binary options require y'all to correctly forecast ii things:
- Whether the marketplace will rise or fall.
- Your forecast needs to exist accurate during a certain fourth dimension frame – called the expiration fourth dimension.
If you're right on the market management by the time of the expiration time, you earn a profit. Existence incorrect means yous incur a loss. The manner binary options works is that if you're right on the market direction, you lot'll get a percentage of what you lot initially invested in.
Typically between 75% and 95% and in some cases, even 100% of your initial investment, depending on your Binary Options Broker.
Supposing we're wrong on the trade, and so nosotros're going to lose the whole corporeality invested in the short term.
We have made a nice infographic that highlights the four steps on how to chief binary options trading.
See below:
At present nosotros're going to focus on step two, which is how to predict the price movement. If you manage to figure this out, then knowing how to brand money trading binary options will be a piece of cake for you.
Now, before nosotros'll outline a method on how to make money trading binary options, nosotros ever recommend taking a piece of paper and a pen and have notes on the rules of the best binary options strategy.
In this sit-in, we're going to look at ownership Calls.
The Best Binary Options Strategy
Our team at Trading Strategy Guides is ready to share with our beloved trading community our 60-second binary options strategy. We don't merely promise this strategy volition make you lot money, nosotros're certain it will. The mathematical model behind this binary options trading strategy has a proven marketplace edge.
The only tool you demand to trade binary options successfully is the RSI indicator.
Even the RSI indicator is non good plenty if it doesn't take the "right" settings. The RSI default settings need a trivial bit of adjustment if you want to primary the 1 infinitesimal time frame. We utilize a 3-period RSI to merchandise binary options profitably.
Naturally, a lower RSI period means that the indicator will tend to be noisier than normal. But it is more responsive to the immediate price activity. Along with the RSI settings adjustments, nosotros as well played around with the overbought and oversold readings. We found out that by using an 80 RSI reading for overbought and 20 RSI reading for oversold conditions, we become more accurate day trading signals.
*Annotation: Make sure y'all adjust the RSI settings earlier you jump into the binary options trading strategy.
Past changing the RSI overbought and oversold line, we have eliminated the racket. So now we're ready to highlight our binary options step-by-pace guide:
Step #1: Find an musical instrument that is showing a low of the last 50 candlesticks. Utilise the lx-2nd nautical chart (1 Minute TF)
The i-minute binary options or the 60-seconds fourth dimension frame is the best nautical chart for trading binary options. In other words, the best binary options expiration time is the 60 seconds fourth dimension frame.
We recommend highlighting the starting point on your charts. And the catastrophe point of your l-candle low that you take identified. But draw two vertical lines on your chart through the starting bespeak and ending indicate of your 50 candle depression.
When y'all count the 50 candle low, you should always start from the current candle. Then go from the right side of your nautical chart to the left side of your chart. If you manage to count 50 candle low, obviously the starting candle betoken will exist your 50 candle depression.
Moving forwards, it'due south time to put the RSI indicator in utilize and spot if nosotros have extreme oversold reading or not.
See below:
Step #2: At the moment the 50 candle low develops, we demand an RSI reading of 20 or beneath
Since this is a reversal trading strategy we need the RSI indicator to show a bullish reversal betoken. An RSI reading below 20 shows that the marketplace is in oversold territory and it can potentially contrary.
In our example below, the ane-minute EUR/USD chart is satisfying the two conditions.
Keep in mind that in order to move to the next step, we need the 50 candle low. Nosotros likewise demand an RSI reading below xx to happen at the aforementioned fourth dimension.
Nosotros added i more gene of confluence that needs to be satisfied. If used in conjunction with the previous ii conditions, it will make you a money maker binary options trader.
See below:
Footstep #3: Look for a bullish divergence to develop betwixt the RSI indicator and the price.
When trading reversals, y'all need to be as precise equally possible. The more confluence factors yous have in your favor the more accurate the reversal signal is.
What we demand to encounter here is for the price to go along moving lower subsequently the 50 candle depression was identified. At the aforementioned fourth dimension, we need the RSI indicator to move higher in the opposite direction.
If the price moves in one management and the momentum indicator moves in the opposite direction, it means they are diverging from each other. This signals a potential reversal signal.
Now it'southward time to highlight how to find the right entry point for the binary options trading strategy.
See below:
Step #iv: Buy a Phone call Pick afterwards the first candle that closes higher up the high of the 50 candle low
The beginning thing you need to do is to mark on your chart the high of the 50 candles low with a horizontal line. The beginning candlestick germination that breaks higher up this loftier is your merchandise entry betoken to buy a 60-2nd Call option.
Information technology'southward that simple!
Subsequently you lot decide the corporeality to invest and pick the 60-seconds as your expiration fourth dimension, it's time to sit dorsum and wait 1 minute before hopefully collecting your profits.
Step #5: You collect your profits if the next candle closes higher than your trigger candle
If at the expiration time, the price is higher than the toll yous opened your Call binary options, y'all're lucky because you're almost to check-in a large payout.
For instance, if you lot've invested $1,000 and your binary options broker offers you an 85% payout, it means that you accurately predicted the outcome of a trade. You go dorsum your initial investment of $1,000 plus the 85% payout which in our instance is $850 in profits.
If you want to purchase Put binary options, use the aforementioned binary options guide, but in opposite.
Encounter below:
Conclusion – Binary Options Trading Strategy
Before learning how to make money trading binary options y'all need a great Binary Options broker. Yous tin't start hitting dwelling runs right out the gate without making sure y'all have a binary options broker who wants you to succeed. Secondly, you need a strategy-based trading technique to reveal the market place direction. You simply demand to forecast if the price volition exist upwards or down during the adjacent 60 seconds, making it very convenient.
We use a heuristic approach to speculate on which way the price is going to movement during the next 60 seconds. At the finish of the day, traders are looking for a reliable binary options organization that will assistance them brand money from trading.
The expert news is that the best binary options strategy is exactly that system. Our squad is built of many traders with experience in the industry, including binary options traders who know how to make winning trades. We're prepare to help you with every step of the way.
Thank you for reading!
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Don't forget to read our guide on regular options trading for beginners hither.
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TradingStrategyGuides
With over 50+ years of combined trading feel, Trading Strategy Guides offers trading guides and resources to educate traders in all walks of life and motivations. We specialize in instruction traders of all skill levels how to trade stocks, options, forex, cryptocurrencies, bolt, and more. Nosotros provide content for over 100,000+ active followers and over 2,500+ members. Our mission is to accost the lack of good data for market traders and to simplify trading instruction past giving readers a detailed plan with step-by-step rules to follow.
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