Common Strategies for
Trading Binary Options

When Trading Binary Options it can be helpful to have an understanding of the market dynamics
and employ strategies to help you become more profitable in the long term.

BEGINNER

ADVANCED

Hints for successful trading

① - ⑤ Beginner  ⑥ - ⑦ Advanced  ⑧ Hints for successful trading

① Take Profit (before Stop)

Take advantage of trading out of your position before expiry.You can trade out of positions between Start and Stop times.Take up to 57% profit.
Or, wait until Expiry and get 80% payout if your trade is correct.

② Take Profit (until End)

You can get up to 80% payout if your trade is correct until the End (expiry time).

③ Stop Loss (before Stop)

You can trade out of a position between the Start and Stop times.
If market rate goes against the direction of your position you can close the position to minimise a loss.

④ Trading strategy 1 - Doubling up (or Martingale)

Traders use this method while they are making money but also when they are losing money.
If you have found a trend you can purchase a similar trade in the same direction (see 4 below).
You can also increase your exposure if the market goes against you.
See example:
Purchase 1USD HIGH and it starts losing
Purchase 3USD HIGH and it also starts losing
Purchase 7USD HIGH and it expires above the purchase price.
Your profit is 1.6USD (-1 -3 +5.6)

⑤ Trading Strategy 2 (apply ④)

It is also possible to decide a single direction (HIGH or LOW) and keep purchasing same direction on multiple Option contracts Hint: if you think it will be difficult to make more than 8 consecutive correct trades, it will be also difficult to make incorrect trade at 8 times. You will be able to profit even tough you make one winning strategy. However you need to understand that there is potential significant downside for a small profit. Check what total positions you can trade first.

⑥ Use candle patterns for market entry!

Timing 1: end of trend, when the market price moves in the opposite direction.

★In the event of UP trend
If the market price is trending upwards and then a Bearish (lower) candlestick appears and its closing price was lower than the last Bullish (higher) candlestick opening price then its a potential sign that the Bull trend is finishing and time to choose a "LOW" trade as a Bearish trend starts.

★In the event of DOWN trend
If the market price is trending downwards and then a Bullish (higher) candlestick appears and its closing price was higher than the last Bearish (lower) candlestick opening price then its a potential sign that the Bear trend is finishing and time to choose a "HIGH" trade as a Bullish trend starts.

Example (in the event of UP trend)

Timing 2: Take advantage of breakouts to find a trend

Markets tend to oscillate but from time to time breakouts occur.
Look at the sideways market. A big movement in one direction may indicate that price will continue in that direction.
If there is bullish candlestick, purchase HIGH, if bearlish, purchase LOW.

⑦ Use Technical Indicators (e.g. MACD)

MACD (Moving Average Convergence Divergence)

A trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the MACD, called the "signal line", is then plotted on top of the MACD, functioning as a trigger for buy and sell signals.

How to see and use

Note: MACD (fast moving line - red line), Signal (slow moving line - light blue) and 0 (zero - orange) line

Trending market

First check whether price is trending. If the MACD indicator is flat or stays close to the zero line, the market is ranging and signals are unreliable.

• Go long when MACD crosses its signal line from below. (Golden Cross)
• Go short when MACD crosses its signal line from above. (Dead Cross)

Signals are far stronger if there is either:

> a divergence on the MACD indicator; or
> a large swing above or below the zero line.

MACD Setup

The default settings for the MACD indicator are:
• Slow moving average - 26 days
• Fast moving average - 12 days
• Signal line - 9 day moving average of the difference between fast and slow.
• All moving averages are exponential.

Example of trading using MACD signal can be found below:

⑧ Hints for successful trading

1. Minimise the risks. Take an advantage of trading out of a position before expiry (for profit or to reduce losses).
2. Analyse your trading result and see where you made profitable and losing trades.
3. Do not trade if you do not have a strategy that you can use consistently.

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