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Binary options strategy


In order to have good performance while trading binary options it is advisable to have a strategy. Relying on luck is not a good option since it will turn your investment into gambling, and eventually you will end up losing. There are two important aspects when talking about binary options trading: - having some good technique to help you predict the market correctly in most of the situations - having a good strategy regarding the use of binary options in a way that greatly increases your winning chances While predicting the market correctly is very good and can make you a profitable trader in almost any circumstances, there are certain strategies that can generate very good profits even for traders who are not very skilled at identifying market trends.

3.1 General tips for improving results


Here are some basic tips that will help you identify the direction where the market is heading: - Watch the charts for longer periods of time, and identify the current market trend. It is well known among professional traders that trading against the trend is not recommended unless you know very well what you're doing - Big spikes in the charts mean that the asset was bought or sold in large quantities in a very small period of time. This happens mostly because speculative investors are trying to obtain short term profits. In order for them to be in profit they must close their positions, which mean they must sell what they initially bought, or vice-versa. This phenomenon is called "marking the profit" and has an opposite impact on the market than the initial movement. That means that every time you will see a big spike in the charts, it is very likely to see normalization afterwards. If the market raised excessively it is time to sell. - Watch an economic calendar in order to know what to expect. At certain announcements the market becomes very volatile, and you must adapt your trading strategies accordingly. - If you are more experienced in trading you can use technical indicators in order to identify trends and market movements. This is recommended only for advanced traders who know what they are doing. Technical indicators can be very tricky if they are used wrongly, and we advise you to stay away from them unless you understand the phenomenon very well. There are plenty of other ways to make profits trading with binary options, so this is not a big inconvenient. However, if you are skilled with technical analysis you should take advantage of it, because it can be a very potent tool combined with the advantages of binary trading.

3.2 Binary options basic strategy


The basic strategy is a simple but effective strategy for binary traders. This strategy can be used when the trades start in the correct direction. That means that if you bought a call option and the market raised (you are in the money but still need to wait until the expiry) you can use this strategy to aim high with low risks. The strategy is best described with an example, so this is what we'll do. Here is a sample on how this strategy can be used: Step 1: You buy a call option on EUR/USD at 1.3500 worth $100 with the expiry in one hour, a payout of 80% and a refund of 10%. The market moves in your favor to 1.3520 (20 points in the first 15 minutes). In this given situation, the strategy can be used as described in the next step. Step 2: You buy a put option on the same asset (EUR/USD in this case) with the same value at 1.3520 (the option must have the same expiry as the initial one, and it will have the same payouts since it is on the same asset). There are three possibilities at the expiry: 1) The closing price is above 1.3520 -> the first option finishes in the money and the second one out of the money. Total investment $200 and total payout $190 ($180 from the winning option and a $10 refund from the losing one). Outcome: a loss of only $10 2) The closing price is between 1.3500 and 1.3520 -> both options finish in the money. Total investment is still $200 and total payout is $360. Outcome: a profit of $160 3) The closing price is below 1.3500 -> the first option finishes out of the money while the second one finishes in the money. The outcome is the same as in the first situation: a loss of $10 As you can see from the above example, by using this basic strategy you can take advantage of a good start and risk only an insignificant amount with the chance of winning big. In this particular situation you risk to lose $10 in order to win $160, which is a reward to risk ratio of 16 to 1!

3.3 Touch options strategy for news trading


The Touch Options Strategy for News Trading (TOSNT) is our first proprietary binary options strategy, which means that this strategy was developed buy one of the traders in our team. You are free to use it if you consider it good, but as with any other strategy, you use it at your own risk and we are not responsible for any possible loss that you may incur while using it. However, it is strictly prohibited to reproduce this strategy on a different website. The TOSNT can be use only when trading the news, as the name suggests, and requires a broker that allows Touch Options. For this strategy we recommend brokers like 24 Option or Option Fair. If you are not familiar with news trading, you can't use this strategy. If you know what news trading is and what happens with the markets during the news, this strategy may be your lucky bullet to success. As with all the strategies presented here, we will use an example in order to make it easier for you to follow. Step 1: You are ready for the release of big news that will shake the markets. The NFP (Non-farm Payrolls) is a good example of such news that affects the US Dollar. 10 minutes before the news is released you take action. Step 2: You buy a Touch Up Option and a Touch Down Option with the same value, at the same time. Let's say you are trading on EUR/USD and the price is 1.3500. The Touch Up option will pay you 250% profit if the pair will hit the price of 1.3525 in the next 20 minutes. The Touch Down will pay you 250% profit if the pair hits 1.3475 in the next 20 minutes. That means that if the market will move more than 25 points in the next 20 minutes in any direction, one of your touch options will hit. Since the NFP shakes the market with at least 50 points every time, one of your options will surely hit. If you are lucky enough and the market moves both ways before deciding which direction it goes you can even hit both targets. If you hit only one of the touch options (this will happen in most of the cases) and you invested $100 in each option, you will get a $350 payout for the winning option and zero for the losing one. That means a net profit of $150. Hitting both options is pretty uncommon, but if you are lucky enough to be in this situation you will make a profit of $500! If you chose the right news that move the markets well enough you are almost certain to win with this strategy. The key to success with this strategy is to choose the right news and have good timing.

3.4 Advanced strategy: binary options combined with classical trading


The Advanced Strategy for Binary Options and Classical Trading (ASBOCT) is another strategy developed by our team's strategist. Just like the TOSNT described above, this strategy cannot be reproduced on other websites, and those who wish to use it are free to do it while taking full responsibility for their actions. We don't guarantee results and cannot be held liable if using our strategies results in loses for you. As a trader you decide if you want to use the strategies found here at your own risk.

The ASBOCT is an advanced strategy because it requires you to use a binary options broker that offers Touch Options and a classical forex broker (or CFD broker if you want to use it for commodities, indices or stocks). We recommend using 24 Option or Option Fair for the touch options and any of the following brokers for the classical trading: Markets.com, Plus 500, Ava FX, Finexo or UFX Markets. This strategy is very difficult to use for US traders because they will have a hard time finding a good forex broker, but if you are from US and already trade with a forex broker, you can use it as well. To understand this strategy you must have good knowledge of traditional forex trading. If you don't know the basics of traditional trading then this strategy is not for you. This strategy is pretty similar to the TOSNT in the way that it is best used when market moves are expected. It can be used before news releases or in very volatile market conditions. If your technical analysis detects a possible burst in one direction of the market, but you don't know in which direction, this is another good moment to use this strategy. Now, that we have described the necessary situation in order to make this strategy effective, we will explain how it works. The touch options are used to hedge the trade that is executed on the normal trading platform. That means that the option's payout must compensate for the loss incurred if the stop loss is triggered. This will give you a risk free trade before the option's deadline. Since this may sound pretty odd, we will give an example to make it easier to follow: You trade on EUR/USD and the market is at 1.3500. You expect big movements in the next 30 minutes. The binary options broker offers you a Touch Down option that will pay 250% profit if the price hits 1.3475 in the next 30 minutes. If you trade with a standard lot on EUR/USD, one pip will be valued at exactly $10. This means that a Stop Loss order of 25 pips (set at 1.3475 just like the Touch Down target) will incur a $250 loss. If you buy the Touch Down option with $100 you will hedge your Buy order of one lot perfectly. If during the next 30 minutes the Stop Loss is triggered you end up with no loss and no profit, since the Touch Down option compensates the loss of the trade. Now let's see some possible outcomes and analyze the results. Here is what can happen in the 30 minutes when the option is live: Outcome 1: The market moves UP with 50 points and you close the trade with 50 pips of profit. You have a profit of $500 from the trade and a loss of $100 from the option. This means a net profit of $400 Outcome 2: The market moves UP with 30 points. You have $300 profit from your trade and lose the option, so you end up with a net profit of $200 Outcome 3: The market moves UP with only 10 points. In this situation your trade ends up as break even.

Outcome 4: The market doesn't move at all and stays at the same value. In this scenario you lose $100. Outcome 5: The market moves DOWN only 10 points. In this unhappy event you lose $100 on the trade and $100 on the option resulting in a loss of $200 Outcome 6: The market moves DOWN with 30 points. Since both the Touch value and the Stop Loss are hit (they are the same) you will end up as break even. Outcome 7: The market moves DOWN with 50 points. You end up with no profit or loss just like in the Outcome 6. Now let's analyze a little the results. As you can see, if the market moves up more than 10 points you are in profit. The more it moves, the higher the profit. At only 30 pips you have a $200 profit, and this can go much higher in the case of high moves. If the expiry value is between -24 points and +9 you end up losing. The loss can be between $340 (worst case scenario when the market is at minus 24 which is extremely unlikely) and $10 if the market ends at +9. As you can see the potential loss is limited while the potential profit is unlimited. If the market moves down more than 25 pips you don't win or lose anything.

ABSCOT profitability chart

Now remember that this strategy is recommended to be used at news releases or in very volatile moments. In this type of situations it is very unlikely to have market movements of less than $25. The higher the market moves, the better the strategy is. To see exactly how profitable this strategy can be, you should check the profitability chart.

3.5 The grinding strategy


The grinding strategy is a simple yet effective strategy. This strategy was developed by our team, and we have the copyrights for it. This is why it is strictly prohibited to reproduce it on a different website. As with our other strategies, we ask you to take full responsibility for the results in the case you choose to use it. We don't guarantee that this strategy will be profitable for you, no matter how well it may sound.

Now that you have read our strategy disclaimer, we will describe how this simple strategy works. This is a betting strategy that is based on the fact that the market cannot move in the same direction in too many consecutive periods. As you know, the market goes up and down, and this is why this strategy is very effective on binary options. Using this strategy, you will start from an initial investment amount and increase it every time your option expires out of the money. You will continue to buy the same option on the same asset one after another, at a higher value. This way, you are certain to win after maximum 3 to 5 options, and because of the value increase you will recover all previous losses and generate profit as well. Here is an example, of how this strategy works. You buy a Call option on Gold with the payout of 85% and no refund. You invest $100 in this option. If you win you get a profit of $85 and immediately purchase a Put option on the same asset (gold in this case), right after the expiry. If the market goes down and you win again, you buy a Call option. If the market goes up and down all the time you win $85 at every cycle. If the market moves against you when you bought a Call option and you lose, you immediately buy another Call option worth $250 (2.5 times the initial value, if your initial option has a different value). If you win, you will get $212 profit that will compensate for the initial $100 loss and still give you a $112 total profit. After your win, you start again with the value of $100 in the opposite direction. In the unlucky event where you have two losses in a row, you continue in the same direction with a value worth 2 times the previous one ($500 if your initial option was $100). If the option is a winner, you will get $425 in profit that will cover for the initial losses of $100 and $250 generating an overall profit of $75. After every win, you start again on the opposite direction with the initial value. Since markets cannot move in the same direction too many times in a row, you are sure to win with a few tries. This is why this strategy it is called grinding: because every time you win an amount proportional to your initial investment. Whenever you lose, you increase the bet amount by 2.5 or by 2, depending on the sequence. As you can see this strategy cannot fail. The only thing you should worry about is your total capital, that must be large enough compared to the initial investment in order to be able to cover a few consecutive losses. Other things you should consider when using this strategy is the maximum value allowed by the broker, and the time the market stops. Make sure you have at least 8 sequences before the market takes a break. If you trade using 30 minutes options, you should make sure there are at least 4 hours of trading ahead.

For more information about the capital needed and the maximum drawdown using this strategy, check our tables below: Round Investment 1 2 3 4 5 6 7 20 50 100 250 500 1,250 2,500 Loss (20) (50) (100) (250) (500) (1,250) (2,500) Win 17 43 85 213 425 1,063 2,125 Total if loss Total if win (20) (70) (170) (420) (920) (2,170) (4,670) 17 23 15 43 5 143 (45) Round Investment 1 2 3 4 5 100 250 500 1,250 2,500 Loss (100) (250) (500) (1,250) (2,500) Win 85 213 425 1,063 2,125 Total if loss (100) (350) (850) (2,100) (4,600) Total if win 85 113 75 213 25

Profit table when the first option is bought at the price of $100

Profit table when the first option is bought at the price of $20

The Reversal Strategy


Many smart and educated people make their livings off of investing. Its not the investing itself that counts, but how you go about doing it. In other words- strategies you employ. There are many strategies that may be used to help make a fast profit, but some of them may or may not work better than others. This article is going to examine one of these strategies piece by piece to help you determine whether or not you should add it to your arsenal. Some strategies will lead to faster results, but theyre not without their consequences. Whether youre an investor thats just starting out, or an experienced investor, you should take the time to familiarize yourself with the various kinds of strategies that you can equip yourself to make luck work for you, rather than against you. One of the most popular investing methods is called the Reversal strategy. Typically experienced and aggressive investors use this strategy when they begin to recognize the signs of a commodity or an asset behaving in a particular way. The asset or commodity will begin to head in one direction, but the investor will be wise enough to know that the asset will return to its original placement. The skilled or advanced traders will purchase a Put or Call option depending on the direction of where the asset has traveled. Lets picture this scenario: As a well educated trader you may notice that a particular asset has consistently stayed in one area for a certain period of time before it starts to wander away from its original destination. A very wise trader would quickly notice this and purchase this option as fast as they could before it returned to the original destination. Thats all the Reversal Strategy really is.

Whether or not youre a beginner investor, you can gain much profit from this strategy if youre quick with your wits and are capable of noticing small details. These small details may help you in the end. Investing isnt really about all the luck you have or need. Its about how much practice and experience youve had when it comes to making split second decisions. If youre not accustomed to making split second decisio ns, perhaps investing isnt for you. If learn how to invest properly, you may be rewarded with more profits than you know what to do with. However, be very careful that you set limits.

All About The Reversal Strategy


If youre a beginner investor just starting out, make sure you can read all the information you can get your hands on. Read e verything you can find online(You dont necessarily have to buy any products), then find some books that discuss how to invest wisely. When you get your fi rst payout from

investing, you may be tempted to invest it into something bigger and better. Avoid this temptation and only use a small percentage of the payout to do this. After all, assets and commodities are only predictable to a certain extent. No one strategy is going to be a hundred percent accurate. Take this into account and save yourself the trouble and the potential financial loss.

The Straddle Strategy


There are many binary investing strategies and methods for investors to try out, but why should you be interested in investing? Many investors are fortunate enough to make their entire living off of investing. Make no mistake, these experts or professionals have had plenty of experience in finding and investing in profitable assets. Some of this experience has taken years to perfect. That being said, no newbie investor should expect to learn and master all of the binary investing strategies in one day. This article is going to answer some typical questions associated with this complex but very profitable strategy. What Is The Straddle Strategy?: Its exactly as it sounds. Investors carefully pair a Call and a put option together so it effectively straddles their chosen asset. One of the most notable and exciting features of this method is the unlimited amount of profits that youre capable of earning. Despite how simple it sounds, make no mistake; you shouldnt try this method if youre a beginner investor. Not many beginners are knowledgeable or experienced enough to pull off this complex but very rewarding method. See below.

Who Is The Method For?: If youre just starting out with investing, you should probably pick a simpler strategy to follow. While the Straddle strategy may seem appealing because of the potential, it will not be as rewarding if you dont understand the strategy completely. Beginner investors should do everything they can to learn more about the various investing strategies that are available to them. If an experienced investor wants to utilize this method for their best potential, they will have the know-how that it takes to find the best setup to utilize this clever strategy. What Can I Expect If I Utilize This Strategy?: One of the things that makes the Straddle Strategy so popular and respected is because of its reputation of taking ordinary investors into wealthy investors in a short amount of time. The profits are literally unlimited and the loss is limited. What more could you possibly ask for?

The Long or short Straddle Strategy


There are two different types of this strategy. Theres the Short Straddle and theres the Long Straddle. Typically, the Short Straddle is used for a sideways occurring market. This technique can be used to take advantage of any and all movements that occur within the growing or dwindling market. These include Down or Up and even Sideways!

If youre unsure of whether or not the Straddle Strategy will work for you, consider trying it out on a demo account. If you get yourself into a mess, the losses will be minimal and easy to recover from. If you know a few investor friends, consider asking them for advice on how to use this method to your advantage. You may be lucky enough to learn a thing or two. The technique isnt new. Its been used successfully for man y years to help advanced investors obtain the income of their dreams. The top leading experts who use the technique have suggested to use it often. If you want better success, be sure to set your price to reflect the current market.