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Binary Options Guide: The Truth About Binary Options
Trading binary options can seem deceptively simple, but leaning too far into that notion can blind people to some of the risks that often accompany this type of trading.
Before I go any further, I want to make it clear I’m not a binary options trader. I trade penny stocks and teach day trading. I’d love to see you join the Trading Challenge — it’s the result of over two decades of trading and a decade of teaching. It’s awesome.
If you’re interested in taking the binary options path, it’s critically important to understand exactly what you’re getting into and set appropriate expectations. And you should get a mentor who trades binary options. Seriously. Preparation is key.
Again, I don’t trade binaries. For the most part I think they’re scams. Can you trade them successfully? There are successful traders in every niche. But most traders lose. That’s the reality of the industry.
It doesn’t matter if you’re trading forex, penny stocks, options, big caps, or … binary options. Most traders lose and most trading teachers don’t want you to know about it. So I’m going to tell you about binary options in this post. But I don’t trade them and I don’t recommend it.
Will trading binary options enable you to buy a villa in the South of France next year? Probably not. Will they allow you to quit your full-time job and finally start on that novel you’ve always wanted to write? Don’t count on it.
Here, we’ll take a look at what binary options trading is all about and you can decide whether it’s right for you. As you read, keep in mind that binary options are getting outlawed in more and more countries. Companies are getting shut down. Or they’re based overseas in places where you can’t sue them. More on that later.
Table of Contents
What Are Binary Options?
Before we dive into specific binary options trading strategies, let’s review exactly what binary options are. According to Investopedia’s definition:
A binary option, or asset-or-nothing option, is a type of option in which the payoff is structured to be either a fixed amount of compensation if the option expires in the money, or nothing at all if the option expires out of the money. The success of a binary option is thus based on a yes or no proposition, hence “binary”. A binary option automatically exercises, meaning the option holder does not have the choice to buy or sell the underlying asset.
At the core, binary options are based on a yes or no proposition. You must decide whether you believe an underlying asset will be above or below a specific price at a specific time.
Binary trades are ruled by expiry times. These time constraints indicate how long you have to make your predictions regarding whether you believe an underlying asset will be above or below a specific price at a specific time. Once the expiration limit occurs, your predictions determine whether you gained or lost money.
Expiration times vary from binary option to binary option. Some of these minimums are known as short expires, which means the expiration date is actually within mere minutes of the buy-in.
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There are medium and long expiries, as well. For medium expiries, the deadline could be anywhere from two to five hours. Long expiries typically last between two and 24 hours. Many experts believe that longer expiration times can help make predictions easier.
What Are the Underlying Assets of Binary Options?
In order to participate in binary options trading, you must first have ownership of an asset that can be optioned for a fixed amount. The types of assets common in binary options include stocks, indices, commodities, and currencies. Many binary traders chooses to trade with stocks, as this option can allow them to get high returns within a short span of time.
Along with indices and commodities, currencies are another popular binary option vehicle. Since currencies are liquid and often subject to dynamic price fluctuation, many traders choose to analyze their binary options across the complex — and often shifting — global currency market.
A quick aside since we’re talking about forex. Be aware that the forex market is among the most difficult to trade. Why?
Because it’s the biggest and most liquid market in the world. You’re up against the smartest, richest, and often most experienced traders in the world. Personally, I don’t want to compete against that. Plus, the forex markets move so fast on news you don’t have access to, that there’s no edge whatsoever.
And now, a new asset has emerged: cryptocurrency. I don’t trade crypto, either. I’ve traded the random crypto-based stock. But this is a whole niche unto itself and I’m happy with penny stocks. Crypto has its own version of binary options — which is why I’ve included it here.
Led by Bitcoin, this new, digital currency class is intriguing investors around the world who see the digitization of finances as the way of the future.
According to Options Advice, there are two prominent ways you can capitalize on Bitcoin binary options. The first strategy is by trading on what you think the imminent fluctuation of Bitcoin might be, and the second is trading regular options with Bitcoins as your currency.
If you’re interested in taking the cryptocurrency binary options route, I strongly suggest familiarizing yourself as much as possible with the trends dictating the ebbs and flows of the altcoin market.
An entire niche financial industry has been built up around educating consumers and future investors of digital coins and tokens. From resources like Cryptoslate to ICO listing sites like Coinschedule, there are many resources available to help you make the most strategic crypto trading moves possible.
There are also a lot of scams. And strange happenings. Like when a crypto exchange CEO died with the ONLY key to $137 million in crypto. Ouch. More than 100,000 cryptocurrency holders learned a very hard lesson. Back to binary options …
What is a Call and What is a Put?
Two of the most common terms you’ll hear throughout the binary options world are call and put. These two labels represent the market positions of binary options.
You typically choose to call if it looks like the value will rise within the confines of the expiry time.
Options also have a strike price, which is the price at which the security would be bought or sold.
If you choose to call, you’re signifying your confidence that a stock will rise within the time limitations. If the stock valuation moves upward at all, you’ll receive both your initial investment as well as the return.
On the opposite end of the spectrum, a put signifies your confidence that the valuation of a stock will drop within a certain time limitation. So if you predict that a stock valuation will decline before the expiration date, and the stock does dwindle, you will have succeeded at that trade and will receive your initial investment — as well as the trade — back.
What Are Other Types of Binary Options?
Beyond call and put options, there are other distinguishing factors that separate binary options from one another.
This guide from Binary Tribune delves more specifically into binary options types based on the number of interactions a trader must initiate with the trade. The levels include one-touch, no-touch, double one-touch, double no-touch, and paired options.
Let’s take a look one-touch and no-touch options …
Essentially, a one-touch binary option indicates that in order for you to receive a payout, a trigger (or predefined barrier) must be reached. Traders often choose one-touch if they feel confident that a stock will move in a certain direction at a minimum amount.
The option only has to meet the predefined trigger level once (hence the “one-touch” term). However, as indicated by Binary Tribune, this strategy is often accompanied by some risk.
Beyond simply calling or putting, you also must feel confident that a certain valuation threshold will be crossed. However, with greater risk often comes greater reward.
In contrast, a no-touch binary option essentially depends on a trigger level not being reached.
Rather than hedging your bets that the valuation of a stock will rise above or dip below a specified amount, you’re betting that the trade will not dip above or below an amount.
Because you’re making the trade with the intention that a threshold will not be crossed in either direction, it’s referred to as “no-touch.” Like their one-touch counterparts, these trades come with greater reward — and risk — potential.
I liken one-touch and no-touch calls and puts to something like an electronic stop-loss. The problem is, you don’t have control. You’d better be damned sure you’re right. Which is impossible.
What Are the Pros and Cons of Binary Options?
Now that you understand binary options basics and the different factors between them, you might be wondering whether this type of trading aligns with your goals. Let’s weigh the pros and cons.
We’ll start with the benefits …
Low Barrier to Entry. You don’t need a masters in economics to engage in this kind of trading. For this reason, many first-timers enter the trading arena through buying and selling binary options. Comparatively, binary trading is relatively simple. When compared directly to other types of trading, including quantitative or arbitrage, trading binary options is straightforward.
Fast Returns. Many traders are eager to see fast results and liquidate within a specific time frame. Those who play the long game (investors) are typically most concerned with growing their money steadily over long periods of time. Many opt to invest in index funds, IRAs, or bonds. Trading binary options is fast paced.
Thing is … you can get all the speed you need trading penny stocks. So, while binary options might be a fast game, the reward might not be worth the risk.
High Rewards. Binary options trading is touted by those who promote it as high reward. It’s possible to receive up to a 70% return on their investments if your binary trades reach your expiration dates in the money. This high average return is what makes this type of trading vehicle attractive to many novice and expert traders.
As explained by Investopedia, the risk on binary options is capped off, so while the rewards could yield high returns, you can’t lose more than the cost of a trade.
Low Cost. If you’re just getting started with trading, there’s a good chance you don’t have excess capital lying around to snatch up shares of the fastest-rising stocks on the market. Binary trades offer an alternative to other types of investments that require high-capital buy-ins.
In theory, you can experiment with a binary trade for any amount you’d like, whether it’s $5 or $50. Starting small and working your way up to bigger trade amounts incrementally is a great way to learn the lay of the land.
As you familiarize yourself with expirations, strike prices and — if you’re interested in one- and no-touch options — triggers, it’s best to gamble with an expendable amount that won’t derail your entire financial status. Notice I used the word gamble — just sayin’.
Accessibility. Binary trading platforms make it easy to trade on any day and at any time. When it comes to binary options, traders aren’t necessarily beholden to standard market times and broker availability.
Now, let’s explore some of the disadvantages of binary trading …
Scams. Conduct any Google search on binary trades and one of the first things you’ll likely notice are the abundance of hits warning against binary scams and shady binary brokers.
Remember when I said I’d get back to the part about shady companies? Here goes …
… and I say this to protect and warn you.
Like I said, these companies are often based overseas. Places like Cyprus. (I have nothing against Cyprus. It’s a beautiful country with amazing people.) Anyway, these companies are based in places where you can’t sue them if they screw you.
Then you sign away pretty much your entire life in the forms they make you fill out. Your odds of winning are so low the brokers who do it are pretty much laughing at you. They’re laughing that so many people fall for this crap. It’s like going to the casino.
So, if you come across a binary broker that sounds too good to be true, it’s because he or she most likely is. And if you come across a binary broker who doesn’t let you liquidate your investment, run in the other direction.
Short term. Binary trades have expiration dates that are often fairly short windows of time. Given this, it’s impossible to use binary options as mechanisms for long-term investments. Which, of course, I don’t mind because I day-trade and teach day-trading. But if you’re looking for buy-and-hold investing, binary options aren’t the right solution.
Can You Really Make Money with Binary Options?
Short answer: It’s possible, but you MUST know what you’re doing. Like I keep saying. Most traders lose. Doesn’t matter the niche. I would never trade binary options. Ever. Your choice, I’m just tryin’ to keep it real.
If you’re serious about binary trading, start small. By making small trades and working your way up, you give yourself breathing room to assess market trends and develop the necessary skills.
As is the case with many types of trading, history is sometimes the best predictor of the future. Many successful binary options traders experience trading wins and financial growth because they’ve spent time studying and familiarizing themselves with market movements.
Wait. Does this sound familiar? Yep. You guessed it: you can’t cheat your way to success. Doesn’t matter the niche. I don’t trade binary options. I don’t recommend you trade them. But if you decide it’s for you then prepare yourself. Study your ass off.
Learning common candlestick patterns can make it easy to spot recurring trading patterns. If you want to understand candlestick patterns — and you do if you are serious about trading — I recommend you get a copy of the classic “Japanese Candlestick Charting Techniques” by Steve Nison. Doesn’t matter which niche you trade, this book should be on your bookshelf.
Of course, trading patterns are never 100 percent accurate, so don’t fool yourself into thinking of them as absolute stock predictions. However, the more you can learn about patterns and begin to recognize them yourself, the more likely you’ll be comfortable making your own options decisions.
Is it Safe and/or Legal to Trade Binary Options?
Naturally, binary options contain risk. And by now you know my take. I pretty much think they’re scams. But there are differing opinions and some even consider them safe trading routes. I’m not gonna tell you not to trade them. I recommend you don’t. I’ll be interested to hear back from you. When you’re ready to trade the way I teach … apply for the Trading Challenge.
While it’s legal to trade binary options within the United States, they’re only available to trade on Commodity Futures Trading Commission (CFTC) regulated exchanges within the country.
Binary options traded outside the U.S. are structured differently to those traded here. You can learn more in this article on Investopedia: What You Need To Know About Binary Options Outside the U.S.
The Bottom Line
The good: Some traders like binary options because they are traded at fixed costs. You know where you stand.
The bad: Binary investments are too much like flipping a coin, there are too many scams, and your odds of winning are so low you might as well go to the casino.
The bottom line: Educate yourself like crazy. Avoid sketchy brokers. Start small and work your way up. Remain vigilant. Stick with these rules, and someday you might reach your trading goals. Will you do it with binary options? I doubt it. But you might prove me wrong.
Want to Try Binary Options Trading?
At this point, I hope I’ve shed enough light on binary options trading that you don’t do it. But … you might be thinking about giving binary options trading a shot. If you do, study your butt off. Get a mentor. Don’t screw around. The best of the best in every niche work with a mentor.
Trading — any type of trading — can quickly become complicated. Like any other sector of trading, it’s important to seek out an education before you attempt to invest in this way. I can’t help you trade binary options. But I can help you learn to trade penny stocks …
Is the Trading Challenge for You?
As a teacher I want to help my students forge long-term, sustainable careers as traders. The Trading Challenge can help you reach your goals through risk-averse, conservative trading.
Plus, my best students — those who have become millionaires themselves — join me in coaching you.
What do you get?
- Wednesday morning live trading webinar. I show you live trades so you can see how it’s done. And it’s not only wins. These are true live trades. Sometimes I lose. But you’ll see how fast I cut losses and why I get out so fast when things turn against me.
- Wednesday evening live lesson and Q&A. No matter where I am in the world. This is killer stuff.
- Thursday live trading & review with Mark Croock. @thehonestcroock is at it every Thursday. You don’t want to miss this. Mark is one of my best students/teachers. He’s constantly in the challenge chat room alerting students.
- Annual Penny Stocking Silver Membership. You need this. Thousands of hours of video lessons and archived webinars. Immerse yourself. This is how to get good fast.
- PLUS: Two monthly bonus webinars by my top student Tim Grittani. It won’t take long to understand how Tim went from $1,500 to where he is now when you see how meticulous he is about his trades. Learn from a master.
WAIT! There’s more …
I always wanted to write that. Anyway, there is more, but you have to apply for the Trading Challenge to get it. Simple.
Will you be my next success story?
As you’ve now learned, if you study hard, start small, keep your scam radar on high alert, and stay educated, then becoming a successful trader is possible. But it’s not easy. So don’t even think about doing it if you’re not willing to work hard.
As for binary options …
Look, whatever you decide, it’s about how much time and effort you put into learning. I don’t think binary options are a good way to go. Plain and simple. But there are success stories.
If you’d rather learn what I teach, then apply for the Trading Challenge. But no lazy losers allowed. Seriously. Only join the Trading Challenge if you’re willing to work hard.
Are you a trader? Do you trade binary options? Comment below and let your fellow traders know how it works for you. Even if you are brand new, I love to hear from readers. Comment below!
How to Understand Binary Options
Updated: September 6, 2020
This article was co-authored by Michael R. Lewis. Michael R. Lewis is a retired corporate executive, entrepreneur, and investment advisor in Texas. He has over 40 years of experience in business and finance, including as a Vice President for Blue Cross Blue Shield of Texas. He has a BBA in Industrial Management from the University of Texas at Austin.
There are 7 references cited in this article, which can be found at the bottom of the page.
A binary option, sometimes called a digital option, is a type of option in which the trader takes a yes or no position on the price of a stock or other asset, such as ETFs or currencies, and the resulting payoff is all or nothing. Because of this characteristic, binary options can be easier to understand and trade than traditional options.
Binary Options Expiration
Starting your acquaintance with binary options, it’s crucial for you to understand how they work, and what affects your profitability when working in the market. As you know, binary options are a type of stock exchange contract, trading in which, the trader gets his profit due to the dynamics of the asset price (a commodity, stock, currency, cryptocurrency, etc.) in which he invests. At the time of the purchase or sale of an asset, the trader makes a forecast on how the value of the chosen asset will change. This financial instrument has a number of features. It has a fixed value, the exact amount of the potential income, the specific time of expiration of the contract, that is, its duration or otherwise, expiration. Today you will learn in detail about this key concept of binary options trading, which directly affects the success of your work in the market.
Expiration in binary options: what is it?
Expiration is the contract term after it’s over the trader will know the result of his forecast. After the contract is expired, the trader knows for sure in which direction the value of the asset has changed: whether its price has risen or fallen and, accordingly, he finds out whether he will gain or lose. From the definition of binary options, which we indicated above in our review, it becomes clear that the very essence of options implies the existence of expiration, the deadline of the contract.
Unlike the expiration period, which is the time period of the bet, the expiration time is an accurate indicator that determines when the option expires, that is, how long the market player will wait for the result of his trade.
The expiration time for binary options is an exact figure, enabling the trader to learn the result of his forecast, for example, 60 seconds, 5 minutes, etc. For example, if a binary option is bought by a trader at 4:50.35 and a 5-minute expiration is specified, then the expiration time begins at 4:55.40. So, at 4:55.40, exactly 5 minutes later, you will know the result of your forecast.
It’s not enough to be a successful trader, if you have chosen only a reliable broker, you are confident in your abilities, and you get along with your trading terminal. Conscious work with the concept of expiration is also half the success in trading. By choosing a specific contract expiration and making the wrong forecast of the dynamics of an asset, the trader will lose his money.
Expiration types in binary options
When trading binary options, the trader can use different strategies and tools, including various expirations available to him. Most often he chooses the expiration of the contract based on the options offered to him in the broker’s terminal, since each binary options broker has its own expiration options, although in most cases their set is repeated. How should one choose the right expiration time of a binary option? What is the best expiration time for binary options? Let’s talk about it in this article.
The following classification of expiration is currently used in the futures market:
Options for 60 seconds
60 seconds is a short-term type of expiration. Specifying it when making a deal, in 60 seconds, the trader will know the result of his forecast. He will know for sure whether the asset price has surged or slumped, bringing him a profit or loss.
Such a super-speed trade is called trading express options, or turbo options. Expiration of 60 seconds is very common among traders today, and that’s especially true for newcomers because it gives them to a number of advantages: it allows the trader to make an unlimited number of transactions during the trading session, and therefore, it can bring unlimited income with minimal waiting for the completion of the transaction. In addition, the percentage of profit that a broker gives for such options is usually much higher than with other expirations. At the same time, earnings come instantly to the account. So, in 60 seconds the deposit will be replenished with money in case of a positive outcome of the transaction.
Most newbies of options trading choose exactly this expiration time for work due to the fact it passes quickly and forecasting the dynamics of an asset through such a time period doesn’t seem to them such a daunting task. Of course, this expiration time is also popular with those traders who like the feeling of risk and excitement. However, there are also negative aspects that the trader should be aware of: high risks of losing all money, the complete unpredictability of the trading result, the presence of market noise, preventing to make an accurate trading decision, not to mention poor analysis of the market since it’s nearly impossible to use data from technical analysis of asset dynamics. This expiration is actively used in different strategies, for example, in scalping, the fastest type of trading, when a trader conducts intensive trading, concluding the maximum number of transactions during a trading session.
Options from 5 to 30 minutes
These options are also common on the market. They are a typical example of a high-speed intraday trading. Opening a deal and specifying the expiration time from 5 to 30 minutes, the trader will know the result of his forecast in 5, 15 or, 30 minutes. These are also intraday options that make trading intense, but they have a number of differences from 60-second contracts. In contrast to the previous type of options, with this expiration time, the trader has a number of possibilities: this is more stable trading, which will allow him to study the data of the indicators, take advantage of various strategies, graphical elements, observe the history of asset dynamics, which, of course, will positively affect the result of his trading. These options are popular with more professional traders who know how to correctly use their trading tools, conduct market analysis and consciously trade in financial markets.
This expiration time is very attractive in terms of profit. During the trading session, you can make an unlimited number of transactions, which will lead, in the case of a correct market forecast, to a decent result. Among other advantages of such options, we should note high profitability and minimum investment. It’s also worth remembering the shortcomings of this expiration time: increased risks, market noise, and the need to very quickly use strategies, analyze the market, work with indicators, and draw the right conclusions.
Options from 1 hour to 24 hours
When trading such options, the trader will know the result of his transaction in 1, 2, 5 hours, 24 hours. This expiration time suggests more relaxed trading, and in this case, options are called medium-term.
This less intensive trading is quite popular with professional traders who can consciously work with the main terminal tools: indicators, strategies, etc. Here one can’t make an unlimited number of transactions during the session. The work is more relaxed and measured. Therefore, it’s suitable for those traders who prefer not to risk their money. As a rule, they seriously approach their decisions, quietly study the dynamics of the asset, use the signals of indicators and various strategies.
In addition to technical analysis, here you can work with the fundamental one, study the news background, and market sentiment. By putting together all the data, you can make a correct forecast regarding the dynamics of the asset and get a high profit. Often, such mid-term options are considered to be an optimal, balanced solution for the trader, since the risks of losing money are reduced by several times, and there is no need to open an unlimited number of transactions in order to get a decent income. In addition, a calm trade will allow you to reach a stable income. It can be a reliable source of permanent income.
However, these options have their own drawbacks. For example, you need to wait for a long time until the end of the transaction. What’s more, for a long trade you require a large trading deposit (because some platforms have fees when trading starts overnight) and free money that you won’t need in the near future. Of course, it can’t be suitable for those traders who like the feeling of excitement, who are impatient while waiting for the outcome of the trade. They aren’t patient enough to get substantial knowledge of the fundamental and technical analysis of the market.
Options from one day to a year
When trading such options, the trader will know the result of his forecast of market dynamics in 24 hours, a month, six months, or even a year. These options are called long-term and they have a number of distinctive features. First, not all brokers provide the opportunity for long-term trading, less popular with traders, and focused on professionals and experienced investors.
Of course, brokers offering such a long trade, thus support professional traders, for whom trading binary options appears to be the main source of earning money. Secondly, such trading suggests the presence of experience, serious preparation by the investor, extensive knowledge of technical and fundamental analysis. In addition, there must be more funds on the trader’s deposit, enabling him to wait long enough for the result of the forecast than when trading, for example, high-speed five-minute options.
As for the advantages of such options, we should note to the reduced risks of loss, they can be a source of stable profit, and they’re easier to forecast because there are more options and opportunities to study the dynamics of assets. So, they will be an ideal solution for prudent and experienced traders who are concerned with the soundness of their actions. They will help professionals to get permanent income from the futures market. Of course, such options, as well as medium-term ones, can be recommended to market novices, so they could improve their experience.
However, long-term trading also has a number of downsides. For example, it’s a long wait for the completion of the expiration time and the result of the trade, and the need to invest large funds. In addition, they are inconvenient to those traders who are interested in instant income in the near future, and those who appreciate the sense of risk, prefer high-speed trading, etc.
How should I choose an appropriate expiration time?
As we wrote above, a conscious attitude towards the choice of the expiration time is one of the key factors for successful trading. The right choice of expiration will allow you to adjust the mode of operation, use the entire set of possibilities for deciding on the dynamics of an asset, etc. Now let’s consider a list of essential nuances you need to pay attention to when choosing a comfortable binary options expiration time:
The availability of free time to trade: if a trader has little time to jump with both feet into the market, for example, he has a full-time job, there is no opportunity for advanced analysis of the market situation, then he needs to stick with speed options. On the contrary, if the investor plans to devote most of his working time to trading and sees it as the main source of income, then an integrated approach is important: he needs to spend time to study the basics of the market, test strategies, find your trading system, trade options with different expiration, but preferably those that will guarantee him a steady flow of income: medium-term and long-term ones.
The availability of trading experience: if the trader has little experience in trading, it’s highly recommended to pay attention to training and working on a demo account. Now most traders start investing in the market with the help of high-speed trading since the result of transactions becomes known within a minute. It’s not so scary, as if the trader would invest money, in options with the expiration time of an hour, or a week. Professional traders pay attention to options with a long expiration time because it gives them a big profit, and reduces the risk of loss.
The use of a particular strategy: finding and choosing the right strategy is an important aspect of the activity of a successful trader. Each strategy, except for a set of tools, has its own expiration time, which will allow you to get the maximum benefit from trading. The same applies to market analysis methods. If the trader has enough free time to work, he can use technical analysis of the market, study the data of indicators. At the same time, indicators often need to be set up, tested, and new oscillators need to be downloaded to the MT4 terminal, and it’s also a time that is important to consider in work. It’s also worth spending time studying not only data on indicators because fundamental analysis needs to be mastered too.
Certainly, it will take much more time, it but can improve the trader’s overall performance. Carefully tracking the news background, you can get the benefit. For example, being aware of the result on the asset dynamics 15 minutes before the news was released, you can set an option for half an hour and earn on the correct forecast. In the event that the player doesn’t have time at all, scalping strategies that have a simple principle of operation will come in handy, as they’re suitable for intensive trading. Choosing one or another trading system, testing it and realizing that it works, brings income, the investor begins to work with it, adapting everything to it: his work schedule, capital, etc.
The readiness to risk your own capital: in fact, some traders choose speed options due to the fact that they feel the excitement and appreciate taking risks. Such players are reluctant to wait for the outcome of the transaction for a long time. So, in this case, they may even be disappointed in binary trading. If the investor is reasonable, prefers to study the history of the asset in detail, analyze the market and, comparing the facts, and drawing conclusions, then it would be more comfortable for him to work with medium-term and long-term options.
How soon the trader will need earnings: with long-term investments, the profit, if it shows up, will appear, for example, in a month, half a year. The advantage of high-speed options is that earnings can be received in a minute or even 30 seconds. Turbo-trading will enable you just for an hour to conclude an unlimited number of transactions and withdraw money from the broker’s platform in the near future.
Whether the trader has enough free money that he’s willing to invest in his trade and which he won’t require in the near future. So, if he has a large amount of money that he doesn’t need now, he can invest them in long-term binary options and make a profit, for example, in 6 months, or a year. If he doesn’t have any extra money, then he should work with short-term and medium-term options in order to increase his capital in the near future and withdraw it.
Choosing a broker with the right expiration
Each binary options broker has its own set of expirations. If some of them try to provide opportunities for the use of any strategies and trading styles, others, for example, focus on the more popular methods of trading – speed and medium trading. It’s important to choose not only a reliable broker but also the platform that will allow the client to trade in the most convenient way. In this part of the article, we will consider what types of expiration are offered by market brokers.
One of the leaders of the binary options trading market, Binomo (a detailed review and feedback), offers expiration from 60 seconds to 1 hour, so many options newbies and those traders who prefer to make money using scalping or other high-speed strategies choose this platform. Here, the maximum possible expiration time is 1 hour, which allows the company’s customers to trade medium-term options enabling them to receive a profit in 1 hour. We can say that this will be a comfortable solution for newcomers of binary trading who don’t want to stop there and are interested in improving their professionalism. Of course, it is more difficult to work here for experienced investors who prefer to make money on long-term investments, opening contracts with the expiration time of a week, month or even a year.
Broker Olymp Trade (a detailed review and reviews), which is also no less popular with traders, offers a more extended choice of expirations: from 60 seconds to 24 hours (if you use the option of setting your own expiration in the terminal). It’s also more comfortable to work here for intraday traders who make money on intensive options trading. Due to favorable working conditions, a simple terminal, the minimum deposit, the broker is interesting to newcomers of the futures market. It will allow them to successfully begin their trading and expand their capabilities, trying their hand not only at speed options but also in trading medium-term and long-term contracts (day trading). Due to the availability of up to 26 indicators in the platform, it’s possible to carry out a comprehensive analysis of the market here and practice high-speed trading. Of course, it’s more profitable and interesting to work here for many market players. However, those investors who prefer to make money on options with the expiration time of a week, month, half a year can hardly be satisfied with these opportunities.
On the contrary, Finmax, a popular broker in the market (a detailed review and feedback), offers an opportunity to trade options with a rich choice of expiration: from 30 seconds to six months, which attracts traders with different work experience. Some investors prefer to trade turbo options because they can receive the first income in 30 seconds. Investors can also trade medium-term options here (from 1 hour to 24 hours). Additionally, the broker offers great opportunities for long-term capital investments (1 month, 2 months, etc. up to six months). The broker did its best that risk-takers could trade conveniently on its platform, as well as those who are interested in a measured work style, prefer to think over the market situation, cautiously study terminal indicator data, conduct a thorough fundamental market analysis, etc.
Depending on the type of asset, different expiration times are offered here. For example, by investing money in currency pairs EUR/GBP, GBP/JPY, AUD/CAD, etc., you can open long-term contracts for up to six months. For those who are interested in cryptocurrency, for example, BITCOIN, RIPPLE, LITECOIN, expiration is available for 15 minutes and up to 1 hour, and you can trade both turbo options and make a profit from medium-term contracts. Those who make money on forecasting the dynamics of global brand stocks also have different options with a varied expiration time. By investing in Citigroup, Goldman Sachs or SNAPCHAT stocks, you can trade medium-term contracts, but investing in Facebook shares will also allow you to work with long-term options.
Additionally, various types of options are also offered by the Binarium broker. These are short-term deals of 60 seconds, medium-term and long-term deals (from 1 day, a month and up to six months), which attracts traders who prefer trading with different strategies. Another leading market broker, Binary.com, offers interesting opportunities for work, on the platform of which you can trade contracts ranging from 10 seconds to 365 days.
Trading short-term options is what nearly all brokers provide in the market, but not all of them offer opportunities for long-term investments. That’s why some investors, for whom options trading is the main source of income, cooperate with brokers Binary.com, Binary, etc.
Strategies with different expiration times
In order to make your trading effective, it’s important to trade thoughtfully, using effective trading strategies. There are a lot of strategies on the market that have many differences, but first of all, it is important to realize what kind of expiration this or that trading system uses. In this part of the article, we will discuss the types of expiration strategies.
60-second expiration strategies
Such strategies are used when trading one of the riskiest options – 60 seconds. During high-speed trading, a fast reaction to a trend change, an ability to make decisions instantly is important, so it’s not recommended for market novices. Nevertheless, today it’s one of the main ways of trading since it suggests earning money in 60 seconds, increased payouts, unlimited income due to the fact that you can open many deals during one session. Such strategies are based on the work of simple indicators, for example, RSI, Bollinger Bands, Ichimoku, Moving Average, which are able to demonstrate market trends in advance, show accurate signals. Also, a number of strategies use graphic shapes to analyze asset dynamics.
Additionally, there are also separate trading methods, for example, hedging, Martingale, trading on support/resistance levels, which will also bring substantial income to the trader. This trade is provided by almost every broker in the market. Among the negative aspects of using such strategies, we should note the high riskiness of turbo options, the need to work out a strategy on a demo account, the difficulties of analyzing the market, the speed of the trader’s reaction. Learn more about 60-second expiration strategies.
Strategies with 5-minute expiration
Such strategies are used to trade short-term options for 5 minutes, which can rightly be considered the optimal choice for a trader who needs to minimize the risks of loss, and who has time to conduct market analysis, make a deal and get decent earnings for an unlimited number of transactions during the trading session. Of course, such express trading is extremely risky. Nevertheless, unlike options for 60 seconds, there are more opportunities here to get a decent income: the trader will have time to analyze the market dynamics, work with indicators, graphic elements, and make the correct forecast of the asset movement. At the same time, the investor won’t be able to use the data of his fundamental analysis of the market, since it requires more time and experience.
Such strategies are popular with traders, since they take into account the specifics of trading express options, so they’re capable of quickly drawing conclusions on the market dynamics, opening more than one transaction during the trading session. On the one hand, it may seem that there is no need to prepare for such a trade, but this is not so. It’s important to allocate time to find and work out a strategy the investor plans to use. Only with the right approach to trading, such trading systems will lead the trader to a high yield. Learn more about 5-minute strategies.
Strategies with 10-minute expiration
Such strategies will allow you to work most effectively with 10-minute options, properly using their features. Of course, it’s high-speed trading, suggesting certain risks of loss. Options lasting 10 minutes are more suitable for market novices who are not advised to trade turbo options. Expiration of 6 hours on binary options is still more comfortable because it enables the trader to study the signals of the indicators in a relaxed atmosphere and receive earnings from several transactions during the trading session.
Expiration in 10 minutes will enable you to use a number of advantages of high-speed trading: it’s possible to make an unlimited number of transactions, the trader’s nervous tension is reduced, the trader can use various tools, for example, indicators (Bollinger Waves, MA, etc.). Of course, such strategies aren’t difficult to use, they utilize a simple market analysis technique, and they generate accurate signals to enter the market.
15-minute expiration strategies
Such strategies will allow you to effectively trade 15-minute options, making use of all their advantages. Such intraday trading is intense, however, unlike the 60-second express options, there’s still a more relaxed and stable rhythm of work that will allow you to accurately predict the state of the market, take into account a number of factors and finally make a substantial profit. To make a decision on the dynamics of assets, a trader can use both the data of technical and fundamental market analysis materials, add indicators, graphical elements to the chart, and trade according to the strategy aimed at the competently work with such options. Such options are popular with traders.
They’re suitable for those investors who do not have much time to complete the work on the market. In some sense, they’re a rational balance between the possibilities of express options and the need to spend time analyzing the market and get a decent income from trading. It’s worth remembering that in order to get a decent income with such strategies, market professionals do not advise trading after 3 transactions. Such strategies are usually easy and simple, they do not require complicated manipulations on the part of the player. Properly working with them, you can get a decent income on the market. Learn more about 15-minute strategies.
Strategies with 30-minute expiration
Such strategies suggest competent trading 30-minute options, using all their features. Such options are perfect for those traders who don’t have much time to analyze the market and conduct trades. They will be an excellent solution for novice investors who learn to work with different market analysis tools: indicators, technical and fundamental market analysis data. They offer the trader a quiet pace of work and decent earnings. These strategies are based on the use of various indicators: for example, MACD, RSI, Momentum, Stochastic, Moving Averages, MFI, Bollinger Bands, Alligator, etc. You can also work with graphic elements, patterns (for example, searching for signals according to the figures «The engulfing pattern», «The Hammer», «The Hanging Man»). Learn more about 30-minute strategies.
Of course, such trading is well-known for risks and the presence of market noise, which should be remembered. However, unlike the 60-second options, there is no such great urgency in making decisions, there is no need to conduct a lot of transactions in order to reach the desired profitability. What’s more, it offers more opportunities to assess the situation and come up with an accurate forecast of the asset dynamics. In addition, unlike turbo options, it won’t be possible to conclude a large number of contracts here during the trading session, and it’s recommended to open no more than three transactions. Moderate trading will allow you to learn how to analyze the market, adequately respond to changing trends in time and make money on it. Having started trading with one of these strategies, you can easily reach stable profitability, and learn how to work with the basic trading tools.
Examples of real strategies
60-second expiration strategies
In such high-speed trading, as working with turbo options, simple strategies are used that will make it possible to instantly decide on the asset dynamics, so that the trader could make more than one deal and make a profit during the session. Strategies using indicator signals are simple trading systems that don’t have a complex principle of operation and actively use the very tools that are in the trader’s arsenal. In addition, strategies that don’t use indicator signals are admissible in the work too. Here the market dynamics is studied with the help of graphical elements.
Strategies using indicators
- RSI (relative strength index) indicator (learn more about the strategy)
This indicator will be ideal in such high-speed strategies since it’s easy to configure, it’s available in almost all trading terminals because it’s a basic technical indicator. Additionally, it has a leading nature of signals, showing a trend change in advance, which will help the trader to see the signal in advance and make a forecast of the asset dynamics. It’s also easy to work with it, even a novice market player will cope with the search for signals. This tool has overbought and oversold areas, with which you can visually see the situation on the market and use this to make a profit. For example, if the indicator line leaves the oversold zone from the bottom upwards, you can buy CALL options, but if its line leaves the overbought zone, you can buy PUT options.
- Ichimoku indicator
That’s another great tool, which is great for express options trading. The indicator is often compared with clouds showing key areas on the chart: resistance and support. Using the signals of these areas, you can also invest money in options and make a profit. Well, if the price line has come out of the cloud twice from top to bottom, you should buy PUT options, if the line has left the cloud from bottom to top, you can buy CALL options.
That’s a simple and understandable indicator in operation, the signals of which are also easy to identify. Its advantage is that it shows a turning point in the price movement. It can be successfully used in the breakdown trading strategy: when the price line breaks through the borders of the indicator channel, the price rebounds to the middle. In this case, you should open positions the lanes converge (a side trend).
Strategies without indicators
- Trade on the trend line (more about the strategy)
This strategy doesn’t use indicators. To get started, it would be enough to hold a trend line on the chart, and when it rebounds from it three times, you can start trading. You can also add a trend line at the bottom of the chart. That’s the «Wedge» pattern. After the wedge is finally formed (3 waves) and the curve has broken through the upper or lower trend line, it is possible to open deals for the purchase of options.
- The hedging strategy (insurance)
That’s a very popular strategy actively used by traders. The very essence of it is that an additional «safety net» option is purchased in order to minimize possible losses from the purchase of the first option. However, such a system is more suitable for working in the Forex market because in binary options, the cost per minute chart can fluctuate sharply, causing losses on both trades.
- The strategy using support/resistance levels (learn more about the strategy)
Using such levels within which the price chart moves can help the trader in his work. Levels give accurate signals about price dynamics. They should be placed on the tops of the candlesticks. When the candlesticks rebound from the level and only on the third candle (since the first candle is a signal, the second is a confirmation of the signal, the third is a purchase) you can buy the CALL option.
- The Stochastic cryptocurrency trading strategy (learn more about the strategy)
Stochastic is a basic market analysis tool. It’s simple and understandable for traders. It can accurately show the strength of a trend, which makes it possible to make forecasts of the asset dynamics based on probable price reversals at a certain point in time. It gets along with different expirations. It can be successfully used to trade various assets, including investments in cryptocurrency. Like the RSI, it has its own overbought and oversold zones, on which this strategy is built around. So, when the market is oversold, when two lines cross the border of the zone below 20, you can buy a CALL option. On the contrary, when the market is overbought, when the lines cross the 80 mark, you can buy a PUT option. Also, signals of this indicator are the position of the moving averages relative to each other: a large interval will indicate high volatility, a small one will point to a decrease in the activity on the market.
Strategies with 5-minute expiration
There are a lot of such strategies on the market and among them, you can choose the trading technique that is more comfortable for you and will enable you to derive the maximum benefit from the market.
- The Waves strategy
This strategy uses signals from two indicators: Moving Average and a wave analysis tool from the developer LazyBear. A skillful combination of these tools will enable you to work with data that has been double filtered. Here it’s worth remembering the basics of the wave theory of pricing, which explains many phenomena in the market. According to the theory of the market, it’s a continuous process, with the periods of ebb and flow, falling and rising prices. The task of the trader here is to be able to see these waves and make correct forecasts.
The strategy uses indicators that can be easily found in the TradingView service (https://www.tradingview.com/): Smoothed Moving Average, WaveTrend with Crosses. Having added them to the chart, you can start trading. In this case, you need to enter the trade after crossing the WaveTrend with Crosses lines. The following picture will be the signal for buying a CALL option: the appearance of a point on the chart, below the level «-25» manually added to the pattern, the breaking the rising candlestick MA in the direction of the bottom. The signal to buy a PUT option will be the following picture: the formation of a point above the level «25», the breaking of the MA by the downward candlesticks.
- A 5-minute contract strategy «Soffit»
It’s a simple and effective strategy that will bring up to 86% of the successful trading positions to the investor. What’s more, it will be convenient for the novice market player. It uses reliable tools that will easily achieve the desired profit: Smoothed Heiken Ashi Candles, DMI ADX Trend 2.0, and the MACD indicator, which acts as a filter for false signals. Trading is carried out via the service TradingView.
To buy CALL options, you need to wait for the following picture on the market: Smoothed Heiken Ashi Candles forms green candlesticks, price candlesticks of quotations are above the indicators of this tool; the DMI ADX Trend 2.0 blue line has crossed the lilac moving average upwards, the trend line has turned to growth, changing its color to green; MACD has formed a signal in the form of the intersection of its lines with upward dynamics. To buy a PUT option, you need to wait for the following pattern to appear on the market: Smoothed Heiken Ashi Candles should form red candlesticks, while the price candlesticks of quotations are located below the indicators of this tool; the DMI ADX Trend 2.0 blue line has crossed lilac moving average downwards, the trend line has turned to growth, changing its color to red; MACD has formed a signal in the form of the intersection of its lines with the downward dynamics.
- The strategy for Binomo for 5 minutes «Mystery» (learn more about the strategy)
This strategy takes into account all the features of the 5-minute expiration. It uses in its work indicators that will increase the profitability of deals up to 87%. It’s simple and straightforward and will allow the trader to open contracts in a timely manner. Its distinctive feature is the use of the oscillator data, which determine the dynamics of an asset, as well as trend indicators that generate signals of the trend development. At the same time, it’s better to work on the strategy in the «Live Graphics» service, where an impressive set of market analysis tools is offered. The strategy requires the use of the following indicators: VWMA, Chaikin Money Flow, Price Oscillator.
In order to buy a CALL option, you need to wait for the following combination of tools to appear on the chart: the Price Oscillator forms an uptrend, the Chaikin Money Flow indicator has crossed the axial scale level upwards, the price has broken VWMA upwards. To buy a PUT option, you need to wait for such a combination of tools to appear on the chart: after a reversal, the Price Oscillator shows a downtrend, Chaikin Money Flow has crossed the axial scale level downwards, the price has broken VWMA downwards.
- A simple trading system for 5 minutes «Cotton»
This trading technique is based on unusual indicators, but it can bring at least 80% of profitable transactions. For work, you should use the service «Live Graphics». It will be necessary to add oscillators to the chart, which precisely determine the strength and dynamics of the market, and turning points of the trend: FireFly Oscillator and UCS_Murreys Math Oscillator_V2. These indicators will provide high-precision signals for high-quality work. There is nothing difficult in the trading process, you only need to determine the trading signal and quickly transfer it to the chart of quotes.
To buy CALL options, you need to wait for such a picture on the chart: when the histogram of these oscillators moves above the centerline, and the price candlesticks are green. To buy PUT options, you will need to wait for the following picture on the chart: the oscillator histograms will move below the centerline, and the price candlesticks will be red.
- The strategy of scalping contracts for 5 minutes «Crossing» (learn more about the strategy)
That’s an excellent strategy that will enable you to accurately and quickly respond to the minimum price reversals. The tools used here will enable you to accurately track the trend fluctuations of the asset dynamics, as well as their corrective rebounds in a narrow time range. This opens up unique opportunities for executing a large number of contracts and making a profit.
For work, non-standard indicators are used, which can be found in the live graphs service tradingview.com: COG Double Channel, and Wave Trend with Crosses. To buy a CALL option, you need to wait for the following signals to appear on the chart: the quotes have touched or briefly entered the green zone of the COG Double Channel indicator, then reversed, forming a correction or a new trend; Wave Trend with Crosses has formed the intersection and divergence of the lines in the upward direction, the sinusoid of the histogram is located above the zero level.
To buy a PUT option, you should expect the following signals to appear on the chart: the quotes have touched or briefly entered the red zone of the COG Double Channel indicator, then reversed forming a correction or a new trend; Wave Trend with Crosses has formed the intersection and divergence of the lines in the downward direction, the sinusoid of the histogram has tumbled below the zero level.
This indicator strategy based on signals from highly accurate technical analysis tools gives stable results, so the trader can count on up to 86% of profitable contracts. All tools used for work are basic. They are offered by most brokers: Bollinger Bands, MA, MACD. These indicators will enable you to evaluate a large technical range of market indicators, thus increasing the overall effectiveness of the work on the strategy.
To buy CALL options, you need to wait for the following picture to appear on the chart: the WMA line, following the asset quotes, has crossed the Bollinger Bands average moving upwards, the MACD has broken the median of the scale with its oscillator lines upwards. To buy PUT options, you need to wait for the following situation to appear on the chart: the WMA line, following the asset quotes, has crossed the middle Bollinger Bands moving average downwards, and the MACD has broken the median of the scale with its oscillator lines downwards.
- The 5-minute binary options trading system «Brook» (learn more about the strategy)
This strategy will enable you to receive up to 88% of profitable trade contracts, which makes it an efficient system. The system is universal, it is easy to work here, and the generation principle will be clear to any investor. The strategy requires the following indicators: Triangular MA 75/85, Exponential MA 25/35, and MACD. The following market signals are used to buy CALL options: the EMA lines have broken through the TMA levels upwards; the MACD moving averages are moving above the median of the scale. To buy PUT options, you need to use the following market signals: the EMA lines have broken the levels of the TMA indicator downwards, the MACD lines of the oscillator are moving below the median of the scale.
- The 5-minute strategy for options «Rolling»
That’s an indicator strategy with a high level of signal efficiency. It will enable you to obtain up to 100% capital gains. You require the following tools: Alligator, RSI, and MACD.
To open a long position, you need to wait for the following signals on the chart: the RSI line shows a steady uptrend, MACD has crossed the axial scale level upwards, the Alligator red and blue moving averages have broken the green line upwards. To open a short position, you need to wait for the next picture to form on the chart: the RSI line shows a steady downward trend, MACD has crossed the axial scale level downwards, the Alligator red and blue moving averages have broken the green line downwards.
- «RS Fractals» – a precise 5-minute strategy
It’s a universal and simple strategy for quick earning on binary options, which will work perfectly with the trend and flat movement of the market. Its signals will enable you to close at least 85% of trading positions profitably. The strategy uses RS Fractals V5 and the relative strength index. To buy CALL options, you need to wait for the following indicator signals to appear on the chart: a green arrow appears on the basis of the trend, facing upwards below the asset quotes, the RSI line is under the oversold mark, you should enter the market at the end of the candlestick. In order to purchase PU|T options, you need to wait for the following indicator signals to appear on the chart: a red arrow shows up on the basis of the trend, facing down above the asset quotes, RSI is above the overbought level, you can buy an option at the end of the candlestick.
- The 5-minute option strategy «Aisle»
This effective trading system will allow you to get a stable income. Here a special tool dubbed Fork is used, whose task is to automatically calculate and build regression channels. It determines the boundaries of price fluctuations, takes into account the average value of the underlying assets. The MACD indicator is used to filter the signals, which increases the overall efficiency of this trading system.
To acquire CALL options, the following indicator signals are used: the price line has reached the lower or middle level of the regression channel and has reversed from it, the oscillator lines on the MACD indicator have turned upwards. The following signals of the instruments are used to acquire the PUT options: the price line has reached the upper or middle level of the regression channel and has reversed from it, the oscillator lines on the MACD indicator have turned down.
- «Feeder» – a 5-minute binary options strategy
That’s another effective indicator trading technique that generates high-precision trading signals. For work, you will need a live chart because non-standard indicators are used here: The Lark Laguerre RSI, McGinley Dynamic, and Squeeze Momentum Indicator.
To open a short position, you should wait for the following signals on the chart: the asset price has broken down the McGinley Dynamic line; at the same time, the Squeeze Momentum Indicator line will turn red and start building below the zero level; The moving average of Lark Laguerre RSI Moving Force has broken the overbought level in the lower direction. To open a long position, you need to get the following signals on the chart: the asset price has broken the McGinley Dynamic indicator upwards, the Squeeze Momentum Indicator histogram turned green and started building above the zero level, and the Lark Laguerre RSI line has broken the oversold level in the upper direction.
- The 5-minute binary options strategy «Triplex» (learn more about the strategy)
It’s a simple and high-precision trading system that generates profitable signals for successful trading. It’s built on the smart combination of the MACD indicator, which under various settings shows the signals of the emergence of trends, enabling you to execute contracts in favorable conditions. To get started, you need to add three MACD indicators with different periods to the chart: 12/26/9, 24/52/9, and 50/100/9.
Next, you can get down to work. To open a long position, you need to wait for the following picture on the chart: the three MACDs form a reversal pattern in the form of the intersection of the indicator lines upwards, the histogram is simultaneously growing above the zero level. To open a short position, you need to wait for the following picture on the chart: three MACDs form a reversal the model of the trend movement in the form of the intersection of the oscillator lines in the downward direction, while the histogram simultaneously dives below the zero level.
15-minute expiration strategies
These strategies aim to get the most out of trading with such expiration. They’re simple and effective methods of work. It’s no wonder novice traders are recommended to trade exactly within this time period.
- The 15-minute trading system «Deduction»
This strategy is a simple and effective method of working with 15-minute options. A number of non-standard indicators are used here, so you should build a template in the «Live Chart» service: Trend Trader Strategy, THEME 1 and Premier Stochastic Oscillator.
In order to open a long position, you require the following signals of these instruments to appear on the chart: there has been an upward intersection with the line THEME 1 (red) of the Trend Trader Strategy level (blue), the Premier Stochastic Oscillator line has crossed the scale level upwards. In order to open a short position, you should wait for the following signals on the chart: there has been a downward intersection with the TEMA 1 line (red) of the Trend Trader Strategy level (blue), the Premier Stochastic Oscillator line has crossed the scale level with downwards.
This is a strategy of highly efficient trading, which will bring the user up to 87% of profitable contracts. The strategy uses non-standard tools, so it’s worth building a system template with the help of tradingview.com. You will require the CM Guppy EMA, MACD 4c indicator, and Detrended Price Oscillator.
The following signal signals are used to buy CALL options: Detrended Price Oscillator forms a steady upward trend; CM Guppy EMA with moving averages with a short construction period has crossed a bunch of lines with a medium-term range upwards (this is a powerful signal of a reversal of the trend movement upwards); MACD 4c has formed the final signal to enter the market in the form of a line breakout above the level 0. The following signals of the system tools are used to buy PUT options: The Detrended Price Oscillator forms a steady downward trend, CM Guppy EMA with moving averages with a short construction period has crossed a bunch of lines with a medium-term market valuation range downwards (this is a powerful signal of a reversal of the trend movement downwards),MACD 4c has formed the final signal to open a trading position in the form of a histogram dropping below 0.
- The 15-minute option strategy «Purse»
This is an effective and universal strategy, the overall effectiveness of which is 86%. It also has an extremely simple operation algorithm. It’s capable of evaluating the market in all modes of the chart layout, which allows traders to work efficiently in the market, obtaining the highest possible deposit growth rates. To trade using this method, the following indicators will be required: Alligator, EMA indicators with line periods 15 and 20, and RSI acting as a filter of the system signals.
To open a long position, you need to wait for the following indicator signals to appear on the price chart: the EMA lines have crossed the Alligator line upwards; RSI is building a trend above the median of the scale. To open a short position, you require the following signals: the EMA lines have crossed the Alligator moving averages downwards; the RSI line is building a trend below the median of the scale.
- The 15-minute binary strategy «Storm»
This trading technique can be considered a novelty in the field of binary trading, although it uses quite familiar indicators. This is a universal strategy with a simple principle of operation, high accuracy of signals (up to 87%). It successfully works with any assets and timeframes. The following indicators are required for this strategy: SMA, MACD, and RSI.
To buy a CALL option, you need to wait for the following signals to appear on the chart: RSI breaks the zero level of its scale upwards, showing a new direction of the trend movement; the SMA moving averages have crossed each other upwards; The MACD indicator, having agreed with the new direction, confirms these signals by a breakdown in the upper direction of the zero line of the scale. To buy a PUT option, you need to wait for the following signals to appear on the chart: RSI breaks the zero level of its downwards, thus demonstrating a new direction of the market; the SMA moving averages have crossed each other downwards; The MACD indicator confirms this move by its breakdown in the lower direction of the zero line of the scale.
- The 15-minute binary options strategy «Crossing» (learn more about the strategy)
It’s a simple trading system that uses a number of unique market indicators to generate accurate signals. The efficiency of work here will be more than 87%, which guarantees a high percentage of capital gains. To work with the strategy template, you’d better use the service TradingView, where a large number of indicators are available, including rare ones. To trade using this technique, you will need the following indicators: Least Squares Moving Average, high-precision Stochastic RSI, and MACD Crossover.
To buy a CALL option, it’s necessary to identify the following signal of instruments on the template: the Japanese candlesticks of Least Squares Moving Average have intersected the moving average upwards; the Stochastic RSI dynamic curves have crossed each other upwards and left the oversold zone; the blue moving average of MACD crossover has crossed the red line upwards. In order to purchase a PUT option, you need to identify the following combination of instruments’ signals on the template: the Least Squares Moving Average candlesticks have crossed the moving average downwards; the Stochastic RSI dynamic curves have crossed each other downwards and left the overbought zone; the blue moving average of MACD crossover has made the intersection of the red line in the downward direction.
- The 15-minute profitable strategy «New Wave»
This market strategy is known as «New Wave». Its accurate signals will guarantee a profitable close of more than 80% of trading positions since these signals indicate the emergence of a trend. This unique technique will enable you to consistently increase the amount of your trading deposit. For this strategy, you will require the Bollinger Waves, EMA (75), EMA (50), and MACD.
In order to open a long position, you need to wait for the following indicator signals to appear on the chart: the central moving average of the Bollinger Waves should break the EMA moving average upwards, the MACD dynamic curves should break the zero axial line upwards. In order to open a short position, you need to wait for the following signals to appear on the chart: the central moving average of the Bollinger Waves should break the EMA moving average downwards; the MACD dynamic curves should break the zero axial line downwards.
Strategies with 30-minute expiration
Such strategies are designed to make the most of 30-minute options, getting a stable income from such trading.
- The 30-minute binary options trading system «Suzuki» (learn more about the strategy)
That’s an interesting strategy that has become the product of a long test of the work of various market analysis tools. This technique has a simple principle of operation. It offers profitable signals that will allow the trader to count on success during trading. For this strategy, you will require less common indicators that are available absolutely free of charge in the «Live Chart» service. These are Pivot Boss 4 EMA, MACDgen, and The Lark Volume Momentum.
To open a long position, you need to get the following signals on the chart: the yellow, blue and gray lines of the Pivot Boss 4 EMA should break the red level of the service upwards; all MACDgen lines have crossed the technical level of the scale upwards; TheLark Volume Momentum bars should also rise above the scale level. To open a short position, you need the following signals on the chart: the yellow, blue and gray lines of the Pivot Boss 4 EMA should break the red level of the service downwards; all MACDgen lines have crossed the technical level of the scale downwards, and the Lark Volume Momentum bars should also tumble below the scale level.
For trading 30-minute options, we offer you to take advantage of a system whose tools are specifically configured to work with this expiration. The system is simple. It has a high level of efficiency and accuracy of signals. It’s as versatile as possible. It will enable you to try your hand at futures trading with various assets, including cryptocurrencies. The work uses rare indicators that are available to the trader in the free service TradingView. These are the Least Square Moving Average, Bollinger Bands% B, and UCS_ Stochastic Momentum Index.
In order to open a long position, you will need to wait for the following signals to appear on the chart: the asset chart has crossed the Least Square Moving Average level 100 upwards (that’s a clear signal of an uptrend); the Bollinger Bands% B line, having rebounded from the oversold level, has crossed the scale line 0.5 upwards (this proves the development of the uptrend of the market); The UCS_ Stochastic Momentum Index has generated the final signal to form a trade using the upward intersection of the moving averages (this tool has confirmed the likelihood of quotes turning up in the near future).
In order to open a short position, you will need to wait for the following signals to appear on the chart: the asset chart has crossed the Least Square Moving Average level 100 downwards (that’s a clear signal of a downtrend); the Bollinger Bands% B line, having rebounded from the overbought level, has crossed the scale line 0.5 downwards (this proves the development of the downtrend of the market); The UCS_ Stochastic Momentum Index has generated the final signal to form a trade using the downward intersection of the moving averages (this tool has confirmed the likelihood of quotes reversing in the near future).
- The 30-minute strategy «Torero»
We offer you an indicator type system with a high level of signal efficiency (up to 87%). To use this strategy, you will require the service tradingview.com because the strategy uses such rare indicators as The Lark LMA v2, MACDAS, and FX Sniper: T3-CCI.
To purchase an electronic CALL contract, you need to wait until such a set of signals appear on the chart: in the field of the asset graph, the lines of FX Sniper have crossed the moving average of the Lark LMA v2 upwards; T3-CCI signals a change in the direction of the trend by intersecting the level of the median scale upwards; the MACDAS moving averages have crossed the level of the median of the scale upwards, forming a high level of divergence between the lines.
To buy a PUT contract, you need to wait until such a set of signals appear on the chart: in the field of the asset graph, the lines of FX Sniper have crossed the moving average of the Lark LMA v2 downwards; T3-CCI signals a change in the direction of the trend by intersecting the level of the median scale downwards; the MACDAS moving averages have crossed the level of the median of the scale downwards, forming a high level of divergence between the lines.
- Technical and fundamental analysis of the market with the 30-minute expiration
The given expiration is comfortable for work because it allows excluding a lot of market noise. Traders can work efficiently with both technical and fundamental market analysis. For a full technical analysis, there are many tools available that will enable you to accurately determine the direction of the trend: moving averages, Bollinger bands, Parabolic SAR, Alligator, etc. Separately, we should note MACD, as it’s one of the strongest oscillators that will allow us to determine the optimal entry point to trade. RSI, Momentum, Stochastic, etc. are commonly used to filter signals. In addition to this, with such a comfortable expiration, it’s convenient to work with technical levels of support and resistance, candlestick patterns (for example, these are «Pin-bar», «Hammer» models, etc.).
A fundamental analysis of the market will help to take into account a number of important factors affecting the dynamics of the market. Here the Economic Calendar comes in handy. Having studied a number of planned and unscheduled news, the player will prepare for a change of trend and certainly earn on it.
- The 30-minute strategy «The Puria Method» (learn more about the strategy)
This strategy will simplify your trading. By using accurate indicator signals, you’ll be able to increase your trading deposit. The work uses the basic indicators: the red MA with a period of 85 (Low; Linear Weighted); the red MA with a period of 75 (Low; Linear Weighted); the yellow MA with a period of 5 (Close; Exponential); MACD.
To open a long position, you need to have the following signals on the chart: the yellow MA should cross two red MAs downwards, all lines keep growing; the control candlestick is above the entire beam of MAs (touching with a shadow is allowed here, but it’s undesirable); MACD is located above the zero level, the column corresponding to the control candlestick should be higher than the previous one. To open a short position, you need to have the following signals on the chart: the yellow MA should cross two red MAs upwards, all lines keep diving; the control candlestick is below the entire beam of MAs; MACD is located below the zero level, the column corresponding to the control candlestick should be shorter than the previous one.
- The two crossroads strategy
This system was developed and tested specifically for trading these options. Thanks to its simplicity and efficiency, it’s easy to achieve a stable income. The Alligator moving averages are used for work. In order to buy a PUT option, you need to wait for the following signals to appear on the chart: the candlestick of quotations should cross both moving averages downwards; the moving averages should cross each other downwards. To buy a CALL option, you need to wait for the appearance of such signals on the chart: the candlestick of quotations should cross both moving averages upwards; the moving averages should cross each other upwards.
- Trading on the news
News trading is especially popular with traders because it allows them to work with facts that directly affect the change in the dynamics of assets. However, it should be noted that during the release of important news the market is extremely unstable and this can lead to financial losses. That’s why you shouldn’t trade in these moments. In addition, you should avoid trading within 15 minutes before the event and 15 minutes immediately after the announcement of the news. When deciding whether to enter a trade, it’s important to be able to recognize the dynamics of a new trend. For work, you should use the data of the Economic calendar.
The classic news trading looks like this:
- To buy a CALL option it’s necessary to perform a number of actions: examine the data of the Economic calendar, select an asset; Conduct a fundamental and technical analysis of the dynamics of the selected asset, find a long-term bullish trend and, if the chart shows an uptrend, you can buy a CALL option;
- To buy a PUT option, do the following: examine the data of the Economic calendar, select an asset; conduct a fundamental and technical analysis of the dynamics of this asset, find a long-term bearish trend and, if the chart shows a downward trend, you can buy a PUT option.
- A strategy with an accuracy of 90% – trading on the news
There’s another effective options trading strategy that will enable you to get the maximum profit from trading on the news. Using it at work, you can easily execute on the market more than 90% of options with a positive outcome. At the same time, such a system is simple, it doesn’t require additional technical tools for analysis and knowledge of the options trading process. Such news trading is a universal strategy, suitable for working with any assets, but assets in the stock and commodity markets will be more profitable in this case.
Let’s demonstrate the possibilities of the strategy on the example of investment in oil. The dynamics of the price of this asset is affected by many factors and publications. Here we will rely on the data of a common statistical indicator – the volume of crude oil reserves. Such information is published weekly on Wednesday. The data of the latest publication suggests that oil reserves have decreased, which leads to an increase in demand in the market, while the price of oil is growing. Using such information, the trader can only buy CALL options with good forecasts or purchase PUT options in case of negative reports.
- Binary options trading on the news (more about the strategy)
There’s another reliable and profitable method of trading on the news, which will allow you to get a significant profit. It’s not surprising that trading on the news is considered to be an easy and profitable way of trading options. With the right approach, you can successfully avoid losses.
By tracking news data of large companies, government agencies, the trader, if he correctly assesses the situation, will receive a profit from the deal he has concluded. For example, if the US Department of Labor has made the publication of news about the growth of employment in the country, it confirms that the American economy is developing, the US dollar is rising relative to other market currencies. Using such data, investors make a deal to buy a CALL option. You can track news and publications of organizations on Investing.com. Traders also use the Economic Calendar.
How should you trade the news on this strategy? In the morning, the investor carefully studies the macroeconomic reporting table, determines the events on which he will trade. You also need to see how many news will come out, and a few minutes before this time, open the news reporting table and the broker’s terminal to trade options. It’s worth remembering that trade is only carried out on news that came out better or worse than the predicted results. If the value that appears in the table is worse than the forecasts, it’s published red colored (you can buy PUT options); if it’s better, the numbers turn green (you can buy CALL options). In this case, the transaction must be concluded instantly, that is, as soon as the news is released. For trade, you’d better choose the major pairs (EUR/USD, USD/JPY, AUD/USD, USD/CAD, GBP/USD, etc.) because the dynamics of quotations will be more intense and you can get a good profit.
Trading with expiration dates of 24 hours
These strategies will allow the trader to derive the maximum benefit from long-term options, minimize the risks of loss, reach a stable income and join the ranks of professional market players. Such trading involves working with different strategies, indicators, news trading, etc.
- «The best strategy for D1»
This universal strategy is perfect for evening traders, since the opening of the transaction occurs once a day, 30 minutes before the close of the daily candlestick. It will allow the investor to get decent earnings. The strategy uses the basic tools: Parabolic SAR, Stochastic, Awesome Oscillator, and AS Williams.
To buy a CALL option, you require the following indicator signals on the chart: the Parabolic SAR point should be below the signal (current) candlestick, Stochastic is directed upwards, the AO and AC indicators are green. To buy a PUT option, you need the following signals: the Parabolic SAR point should be above the current candlestick, Stochastic is directed downwards, the AO and AC are red.
- Weighted Taylor – a strategy for D1
That’s a highly profitable expiration strategy for a period of one day. It will allow you to derive the maximum benefit from trading, get a decent income from investments in the market. The strategy uses the following indicators: 5 WMA (the linear weighted moving averages), RSI, and MACD.
To open a short position, you require the following signals on the chart: the fast moving averages should cross the slow ones from top to bottom; The RSI should go beyond the red corridor upwards; the MACD columns break the red level in a downward direction. To open a long position, you require the following signals on the chart: the fast moving averages have crossed the slow ones from the bottom upwards; RSI has broken the red zone upwards; the MACD line should rise above the red line.
Expiration is an important factor in the success of a trader who trades in the binary options market. It’s definitely worth using its capabilities in the work, which, of course, will improve the overall performance of options trading. It affects the intensity of trading, the number of transactions made during the session, the effectiveness and comfort of the trader. It’s not so difficult to choose a suitable type of expiration for yourself.
The crucial factors include a convenient trading mode for the player, his free time, work experience, a particular strategy, whether he likes to risk money or, on the contrary, he would like to spend more time on market analysis, etc. Properly using a specific type of expiration, market players can completely «tailor» trading for themselves. For example, they can trade long-term or short-term options, do it at a convenient time, in a convenient format, using convenient tools, strategies and so on.
What Are Binary Options Trading? – Binary Options Explained With Example
Binary Options trading are known for their simplicity and all-or-nothing nature. Moreover, a few reasons are behind to give this trading type name binary option. Options are derivative instruments. It can be traded as forex pairs, cryptos, stocks, indices, commodities, etc.
Furthermore, for traders, it is a lucrative trading type because of it’s quick and high return percentage. But, according to the research, binary traders should pay close attention to the rules of trading before diving with real money.
So, consider this article as a guideline for beginners and hence, we will keep it as simple as possible. Let us start with the binary definition first.
What Is Binary Options Trading?
Abe Cofnas is a thought leader and analyst in the financial industry. We took a line from his book to explain the actual meaning of binary.
“The binary option is called binary because it fits the condition of being either right or wrong-all or nothing.”
On the other hand, the exotic option allows a trader to speculate on the price movements of various instruments. To trade binary option, you don’t need to purchase an underlying asset.
You rather predict whether the price will increase above, or decrease below the strike price or purchase rate. The strike price is the price, at which traders trade underlying assets. Market price must increase or decrease, by the time the trade expires.
The expiry period for binary options is very diverse. The time frame starts from 30 seconds and lasts up to a year. After prediction the price, you will select the call or put option, depending on the asset price movement.
If you guess accurately, you win a payout. But the wrong prediction will give you nothing. It is required to mention that the payout rate differs from asset to asset and broker to broker.
Speaking of assets, there are multiple trading instruments that you can trade as binary options. Before selecting any pair, find some strategies and rules on how to trade binary options .
We will explain all the terms and facts of the binary option below that will give you more knowledge to understand.
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