We’ve been waiting to share with you our binary options trading strategy, which is designed to help you decide whether you like to trade binaries and explain how to trade binary options. If you don’t want to be regarded as an addicted gambler you need a strategy or a tactic to help you master binary options.
This is where our TSG team comes to the rescue aka to give you the best binary options strategy.
The main thing why we’ve got an interest into learning how to trade binary options is the fact that binaries simplifies what we’re already doing in Forex. At the same time binary options also allowed us to make more money in the process, while controlling the risk.
From the perspective of someone who has little or no experience in this area, binary options are easy to understand. If your favorite approach to trading forex is to jump in on a fast price movement and ride the intraday trend for as long as the momentum lasts you can learn how to make money trading binary options very quickly.
When we first discovered binaries a light bulb went on over my head, like in a cartoon. We figured out that we can do the same thing that we’ve been doing in Forex, but walk away with 75%, even 95% gains because we only needed to get the direction right, not worry about how many pips we could grasp in the process.
And that, my friend is the real beauty of binary options.
We know that many of our readers are versatile traders who understand what are binary options, but we want to give everyone a chance to learn how to master binary options trading, so bear with us while we give a brief explanation on how to trade binary options.
What are Binary Options
Let’s now start by understanding how binary options work.
Essentially, we can trade binary options for any type of instruments, be it commodities (Gold, Oil or Silver) be it Forex exchange currencies (EUR/USD, GBP/USD or USD/JPY) or be it stocks (Amazon, Tesla or Twitter).
So, the first thing you need to decide upon is to select the asset to trade.
Secondly, each of these instruments has a current value at any given point in time before we’re ready to submit our trades. How to trade binary options depends on our trading skills to predict where the current value will be some time in the future. In other words, it’s our skills to predict the market direction that will determine our success in trading binary options.
The market can only go up or down. If we believe the current value will go up in the near future, then we buy a Call option. On the other hand, if we believe the current value will go down in the near future, then we buy a Put option.
Thirdly, we need to determine what is probably the most critical aspect of trading binary options, which is the expiration time. The binary options expiration time is the one that will ultimately determine if you’re making a profit or not.
So, how to trade binary options requires you not only to correctly forecast two things:
- Whether the market will rise or fall
- Your forecast needs to be accurate during a certain time frame – called the expiration time.
If you’re right on the market direction by the time of the expiration time you earn a profit. Being wrong means you incur a loss. The way binary options works is that if you’re right on the market direction you’ll get a percentage of what we initialy invested in, typically between 75% and 95% or in some cases even 100% of your initial investment depending of your Binary Options Broker.
Supposing we’re wrong on the trade, then we’re going to lose the whole amount invested.
To make it easy for you we have made a nice infographic that highlights the four steps on how to master binary options trading.
Now, we’re going to focus on the step two, which is how to predict the price movement. If you manage to figure this out, then knowing how to make money trading binary options will be a piece of cake for you.
Now, before we’ll outline a method on how make money trading binary options, we always recommend taking a piece of paper and a pen and note down the rules of the best binary options strategy.
For this demonstration, we’re going to look at the buying Calls.
Best Binary Options Strategy
Our team at Trading Strategy Guides is ready to share with our beloved trading community our 60 seconds binary options strategy. We don’t just hope this strategy will make you money, but we’re certain about it, because the mathematical model behind this binary options trading strategy has a proven market edge.
The only tool you need to trade binary options successfully is the RSI indicator.
But, even the RSI indicator is not good enough if it doesn’t have the “right” settings. The RSI default settings need a little bit of adjustment if you want to master the 1 minute time frame. We use a 3-period RSI to trade binary options profitably.
Naturally, a lower RSI period means that the indicator will tend to be noisier than normal, but more responsive to the immediate price action. Along with the RSI settings adjustments, we also played around with the overbought and oversold readings and found out that by using an 80 RSI reading for overbought and 20 RSI reading for oversold condition, we get more accurate day trading signals.
Note* Make sure you adjust the RSI settings before you jump into the binary options trading strategy.
By changing the RSI overbought and oversold line, we have eliminated the noise so now we’re ready to highlight our binary options step-by-step guide:
Step #1: Find an instrument that is showing a low the last 50 candlesticks. Use the 60-seconds chart (1 Minute TF)
The 1-minute binary options or the 60-seconds time frame is the best chart for trading binary options. In other words the best binary options expiration time is the 60 seconds time frame.
We recommend highlighting on your charts the starting point and the ending point of your 50 candle low that you have identified. Simply draw two vertical lines on your chart through the starting point and the ending point of your 50 candle low.
When you count the 50 candle low, you should always start from the current candle and go from the right side of your chart to the left side of your chart. If you manage to count 50 candle low, obviously the starting candle point will be your 50 candle low.
Moving forward, it’s time to put in use the RSI indicator and spot if we have extreme oversold reading or not.
Step #2: At the moment the 50 candle low develops, we need an RSI reading of 20 or below
Since this is a reversal trading strategy we need the RSI indicator to show a bullish reversal signal. An RSI reading below 20 shows that the market is in oversold territory and it can potentially reverse.
In our example below, the 1-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 and the RSI reading below 20 to happen at the same time.
We added one more factor of confluence that needs to be satisfied which, if used in conjunction with the previous two conditions will make you a money maker binary options trader.
Step #3: Look for bullish divergence to develop between the RSI indicator and the price.
When trading reversals you need to be as precise as possible and the more confluence factors you have in your favor the more accurate the reversal signal is.
So, what we need to see here is for the price to continue moving lower after the 50 candle low was identified, but at the same time we need the RSI indicator to move higher in the opposite direction.
If the price moves in one direction and the momentum indicator moves in the opposite direction it means they are diverging from each other and it signals a potential reversal signal.
Now, it’s time to highlight how to find the right entry point for the binary options trading strategy.
Step #4: Buy a Call Option after the first candle that closes above the high of the 50 candle low
The first thing you need to do is to mark on your chart the high of the 50 candle low with a horizontal line. The first candle that breaks above this high is your trade entry signal to buy a 60-second Call options.
Is that simple!
After you have decided for the amount to invest and you have picked the 60-seconds as your expiration time, it’s time to sit back and wait 1-minute before hopefully to collect 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 price you opened your Call binary options you’re very lucky because you’re about to check-in a big payout.
If for example you invested $1,000 and your binary options broker offers you an 85% payout, it means that if you accurately predict the outcome of a trade you get back your initial investment of $1,000 plus the 85% payout which, in our case is $850 in profits.
If you want to buy Put binary options, use the same binary options guide, but in reverse.
Conclusion – Binary Options Trading Strategy
Before learning how to make money trading binary options you need a great Binary Options broker. You can’t start hitting home runs right out of the gate without making sure you have a binary options broker that wants you to succeed. Secondly, you need a trading strategy to reveal the market direction. You only need to forecast if the price will be up or down during the next 60 seconds so that’s very convenient.
We use a heuristic approach to speculate in which way the price is going to move during the next 60 seconds. At the end of the day everyone is looking for a reliable binary options system that can help them make money from trading.
The good news is that the best binary options strategy is exactly that system so you’re in the right place at the right time. Our team is built of experienced traders that know how to trade binary options and we’re ready to help you with every silly little thing so you can get where you want to be. We’re very easy to be reached and we are even ready to literally bend over backwards to help you.
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