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Before we start trading, we have to know how to trade and what is the best strategy for us. We have to make sure that we get all the necessary information. When you will register with the certain broker, you will have possibilities to learn the best strategy from them. Many brokers offer their own educational materials which will help you at the beginning. You can contact their support and use their personal services. Many brokers offer even their own personal managers which will help you to analyze your trading and making better decisions.
How to trade?
Binary options are the simpliest way of trading online. You only have to decide whether the value of assets will go up or down and nothing else. Once you have opened the account, just go to the broker's trading platform, select the asset you want to trade, choose the type of option and expiry time, enter the amount you want to invest and then decide whether the value will go up (Call option) or down (Put option). At the expiry of the time, the payout will be automatically added to your account, in case that your prediction was correct.
Trading strategies are the crutial element in binary options trading. Strategizing your investment can help you get better results in trading and consequently you can achieve a financial success.
First two things you must know before you start trading are which asset to trade and how much money to invest. Your first goal should be to minimaze the risks as much as possible. The best thing you can do is to focus only on one asset, the asset you know the best. For example the currency pair: EUR/USD. With this approach you will always focus on the one asset and have control on every movement of the value. Secondly, you have to know what is the best amount to invest per one trade. We recommend that you never invest entire amount that you have on your account. Invest just 5% to 10% of your total amount. With this approach you won't lose all of your money, if by chance your prediction is not correct.
4 Top Trading Strategies for Binary Options
All trading strategies for binary options begin with good technical analysis (the study of an asset's previous performance over different time periods). If you understand how an asset performed and why, you may be able to predict its progress. Different brokes provide a variety of charts on their trading platform that allow you to see at a glance how an asset has performed. The charts may look complicated at first glance, but are actually very straightforward and easy to read.
The Trend/Reversal Strategy
The basic strategy for trading binary options is the trend strategy. It is suitable for all kind of traders, beginners and also for experienced traders. With this type of strategy you focus on the graph and movements of the value, in which direction the value move, up or down. Trend strategy is the strategy wherein we assuming that the value will constantly rising or falling after the value has changed its direction (Trend is a state of constant unchanged action). So when the value after a constant fall suddenly change the direction in other direction, then we can assume that this will happen again and that the value will constantly rising through the next random period of time.
You can see the above example here (when the value suddenly change the direction and go up, then the trend line shows us that the value will go up. We invest in Call option):
It can happen exactly the same in other direction (after a constant rising, the value suddenly changed the direction). We invest in Put option that the value will go down:
Bollinger bands is a simple strategy that displays the performance of an asset as a line on a chart. There is an additional upper range line above the asset, and a lower range line below it. If the asset touches the upper line it is recommended to sell. If it touches the lower line it could be a good moment to buy. Bollinger bands is a good starting point for anybody who wants to explore trading strategies.
RSI - Relative Strength Index
RSI is used to try and gauge the strength of the markets. A high RSI (above 70) means that the market is overbought and the bullish momentum may be about to reverse. If the RSI line rises above 30 a bearish trend may be reversing and traders are beginning to buy. RSI is particularly suited to more advanced trading platforms (like the one we'll review shortly).
The stochastic oscillator is a momentum indicator that uses support and resistance levels. It can be used to predict a change in market trends, giving traders strong clues about when to buy or sell a particular asset. This strategy was developed by a professional trader and financial academic called George Lane. Many traders avoid stochastics, thinking that it is too complex for them. In fact, the charts are easy to read and experience teaches us which signals to follow.
You might think like too many traders usually do that strategies are for "professional investors" only, that only traders who have a background in mathematics or economics and years of investment experience can successfully implement these so-called sophisticated methods.
The fact is that more and more people worldwide trade the markets without experience or brokerage agency and manage some pretty impressive portfolios all by themselves.
IQ Option, one of the more prominent binary options, forex and CFDs brokers today, is working hard to enable people with little or no experience to learn trading different markets.
IQ Option traders can enjoy access to the free $10,000 unlimited demo account, video tutorials, trading calendars, dedicated personal manager, personal analyst, and many more.
Open free Demo account and start learning different strategies today.
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