Best Binary Options Trading Strategies

Our Top Binary Options Trading Strategies

Market movements are driven by the trader response to technical and fundamental analysis (interpretation of patterns and the assimilation of economic releases) in a bid to predict future price movements. Yet, with the risks of misunderstanding data and overtrading always a temptation, a well-managed trading plan is essential before stepping foot into the financial arena.

A binary trading strategy should not only consider how to appropriately buy a call or put option, but also take into account the importance of a time as a factor. A good strategy will always consider both time and price in the analysis before placing a trade.

In no particular order, below is a list of the best strategies for Binary Options.

  1. Trading divergences with oscillators: Take an option based on the divergence an oscillator is making when compared with the actual price movement.
  2. Trading the news: Interpret the economic releases and set expiration dates based on the economic releases’ time-span.
  3. Identifying ranges: Trade one-touch or boundary options when the market is most likely to range. For example, in Asian sessions, trade should be made in the first half of the week during which NFP is released.
  4. Trading big expiration date options on important economic releases: Releases such as interest rate decisions, press conferences, NFP’s, etc. These bring sharp moves that are not destined to be traded with short-term expirations, as chances for the option to expire out of the money increase.
  5. Trading with adjusted expiration dates based on the time frame of analysis: For instance, when technical analysis is applied on the four hours chart, it makes no sense to trade one minute expiries. The difference between the expiry date and the time-frame analysis is too big and induces random outcomes for your option. If profitable, then this is only down to luck.
  6. Using good money management techniques: Invest only a proportion of your portfolio on a specific period of time and then divide that amount into multiple entries for your options.
  7. Using long-term expiration dates, such as daily, weekly and monthly: Trading should be a decision based on technical and fundamental facts – short-term expiries are just not suitable for that. Long-term expiration reduces the arbitrary effect induced by the short-term expiration dates and make trading more logical, hence an increased profitability.
  8. Hedging positions with different expiration dates: Alternate short-term and long-term expiries in order to make the most out of binary trading.
  9. Using multiple brokers when trading: This reduces your exposure to any single broker. Diversification is one of the all time best strategies to ensure that you receive the best pricing and action from your broker.

 
Although the downfalls of using short-term expiration dates have been mentioned above, they are an extremely popular trading method. It’s likely that most of you will be tempted to use them anyway as it’s in our nature to favour the possibility of turning a quick profit.

Don’t get me wrong, these can lead to successful trading when paired with strong discipline and financial conduct. Even so, this should continue to be perceived as more risky than investing in medium to long-term expiration dates and therefore it is not a strategy I would tend to recommend, especially not to new or amateur traders.