Know Immediately! These 5 Best Binary Option Strategies Can Do
Did you know that forex trading through Binary Option is easier to do than spot forex. This is because you only need to select “Call” when predicting the price rises and “Put” if the price will drop. As a trader, you do not need to take into account the lots and spreads before entering the trading. Nevertheless you still have to know the price movement and must do the analysis and make a strategy in order to get the desired profit.
There are a lot of binary option trading that can be done, ranging from that based on expiry time to applying certain indicators. In addition there are also some strategies that follow the direction of prices such as trends and sideways trading and rely on candle patterns such as pin bars and inside bars.
The question is what is the best strategy?
Answering this question depends on each trader. This is because each strategy has its own advantages and disadvantages. One of the best ways you can choose the best type of strategy is to take the most understandable strategy.
For example, if you are an aggressive and responsive trader to price changes, then you can take a short-term strategy like 1 minute binary option trading.
There are many strategies in the binary option that you can do. Here are 5 binary option strategies you can try to do.
1. Strategy Trends
You have to admit that price trends will bring in invaluable potential. In the forex market or the binary option, trends are rated as the ideal conditions for entry into the market. Although the binary option does not take into account the magnitude of the price movement in considering profit, opening a position when the price is being trending is preferred.
The above can occur because the existing trends can facilitate you in analyzing the price movement. If the trend continues, then you can easily assume positions more convincingly.
Due to the above advantages too, many trend strategies are chosen by binary option traders who are either beginners or who already have experience. One of the indicators used in this strategy is MA and Trend Line.
In general, a trader who follows the trend will look for forwarding signal, while traders who like to fight the current will look for reversal signal.
2. Pin Bar Strategy
In applying this strategy traders will rely on the pin bar, because the pin bar is one of the reversal signals that many traders can trust. Pin bar appearance is always considered important either as a primary indicator or just a confirmator.
Longer pin pin axis position you can use as a guide to estimate where the price will move. For example a pin bar that has a long axis located at the bottom of the candle is called the Bullish Pin Bar.
If Pin Bar above occurs after Bearish Candle, then the pattern can be a sign that the price will turn Bullish.
3. Hedging Strategy
This strategy is a strategy that you should consider in trading binary option. In Binary Option, the use of hedging strategies is more flexible, because Binary Options does not forbid traders to place opposite options in an instrument at the same time. With this convenience, you can maximize your hedging opportunities better.
The main purpose of using hedging is to anticipate the loss of the option. So when you have the option “Call” which will end within 5 minutes, but the price is still moving in a bearish position, then you can open a new “Put” option to offset the potential loss from the first position.
Before implementing this strategy, then it’s good you understand well the risk of hedging first. Although it looks very effective to do, if hedging users are not optimal in using the strategy, it could be the loss will increase.
4. Risk Reversal Strategy
This strategy is very similar to the hedging strategy, where this strategy is a method that is run by opening 2 options “Call” and “Put” at the same time. The difference is that this strategy is not to minimize risk but also to make new profits.
If you already understand well how to do hedging, then you will not be difficult to try risk reversal strategy. Not too much of a difference as you will implement this strategy.
Way, you just need to put different amount of capital in 2 opened option. The largest capital should be placed in the position that you think works best.
Thus even if one of the positions will end in a loss, there is still a position that can be profitable for you.
5. Straddle Strategy
This strategy is still closely related to the placement of “Call” and “Put” options simultaneously. In this strategy there is an emphasis on price conditions and analysis ways that can help you to find the potential level when going into position.
Basically, this strategy will focus on support and resistance as a price barrier that sets the “Call” and “Put” areas. Overbought and Oversold levels on the Oscillator indicator can be used as a potential area.
For example like this, if the position “Call” and “Put” has reached overbought and oversold, then you can take advantage of opportunities by adjusting the expiry time so that both options end at the same time. If you succeed, then the profit can not only be found in 1 choice only, but other options will generate profits as well.
The thing you need to consider is to determine expiry time as one of the key straddle strategies. This is because you can not benefit if two new options close when the price has broken through one of the support or resistance limits.
Therefore setting a valid price range and market conditions with stable volatility is indispensable. This is necessary to ensure that the price stays in the range position when both options end.
There are so many ways and strategies that you can win trading in Binary Option.You can choose the type of strategy that you think best matches your risk and personal characteristics. Never implement a strategy that you do not master, because it will make you have the potential to fail.
Hopefully the above information can be useful for you all. If you have any further questions related to the above discussion. Feel free to ask us via the comment field below.