Binary options trading is not easy if you want to make money. To be successful it requires measured risk taking and someone who is willing to learn different strategies for different market conditions. Binary options traders must always learn and evolve if they want to keep a high enough winning percentage to make hefty profits. Here are some different binary options trading strategies that we use to make money. Open A Free OptionRobot Account. There are hundreds of different strategies that traders use, but these are our favorites that give us the best chance to make money.

A lot of binary option contracts expire in one to ten minutes. A trade this short requires a scalping mentality. The fundamentals of the underlying security are probably not important to pay attention to here. What you want is to take advantage of short term patterns in price action.

There are a few ways that you can do this well enough to make money. Here are some of the best binary option strategies to make money:. There are many technical indicators to choose from. Each indicator has its benefits and its weaknesses and limitations. Ultimately it takes some knowledge and experience to understand how to use them to your advantage so that they give profitable buy and sell signals for your trading.

Use the back testing feature to your advantage and you can find the indicator or mix of indicators that work for your trading style and whichever security you are trading.

You should also be aware that certain types of market environments favor different indicators. A very choppy market probably favors a relative strength or bollinger band approach, and a more directional market probably favors using moving average based indicators.

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Here are some additional strategies you should read as well. There are binary option specific services out there, and there are other larger services meant for all types of traders. Signaling services can be very good if you need some trade ideas, but blindly following every single will does not usually equate with profitability. The best results come from combining signals from multiple indicators and services.

Before you use any signalling service, make sure to do your research. Many services simply do not work. You need to ask yourself, if a trader can make money with their own signals, why would they sell their winning trades to other people? Whatever service you choose, test your strategy with them many times before putting your money on the line.

If you spot a lot of activity in one direction, or you see unusually large transactions or orders on the book , you may get an understanding of which direction the stock is likely to head in the near future. Professional traders have long used the order flow of a stock to predict which direction it is heading in the short term. The only problem is that binary options brokerages do not display this information like some of the professional equity trading platforms do.

The key for traders will be to have two platforms open at the same time, placing trades in the binary option account but using information from the equity account. This strategy will not apply to commodities or foreign exchange trades but it can work well with equity trades. A trader can see when a stock is picking up unusual momentum compared to how it usually trades. Momentum is characterized by large quick moves, and moves that are much more prolonged than is normal.

Even if a trader does not predict the beginning of a momentum move, they can still make money. The goal is not to predict momentum before it starts, it is to jump in and ride the wave until it shows signs of slowing. Binary option trades are uniquely suited to taking advantage of momentum trades because they are so short term, and a trader only needs to be in the money by a tiny amount in order to have the option pay out. Even if a trader gets in later in the momentum based move, as long as they are in the money when the option expires they will get paid.

A binary options trader can easily make money using a momentum based strategy. Look for fast movement and jump in the direction of the move. Trading the news can be a very tricky strategy, and it is not something that we would recommend to binary option beginners. News traders usually need to be in extremely quickly after news is released, because computers that can read news releases and act on the information before a human can read the first word are competing against people.

A trader using a news based strategy needs to quickly read the release, asses what it materially means to the price of the stock, and judge how the stock is priced relative to where it should be given the new information. Traders who use news based strategies are often MBA types, or quantitative type people.

Even though news trading is complex, a binary options trader may be able to take advantage of the public reaction to news by capturing a small portion of the greater move. Remember binary option trading only requires you to be correct in your trade by one penny.

Remember when you are trading any news release that the direction that it will push the stock is not always apparent to an untrained person. Sometimes even if news is negative, but not as negative as the market expected, you will see the negative news make a security increase in value.

Remember to always compare news against expectations before take a position.

Binary Options Trading Strategy

Expectations are not always readily apparent, and you should definitely test news based strategies in a demo account before you use real money. You will either get the hang of trading news, or decide that it is too hard to predict how news will affect the price.

One strategy that many quantitative traders are taking advantage of is called correlated trading. This is largely done by computers, so you need to be fast, but a human can still make money if they are ready. The way to make money is to find a pair of stocks, currencies, commodities, or some mixture of the two that either trade in tandem, or reliably move in the opposite direction of each other negative correlation.

An example of this type of trade would be Citigroup and Bank of America. On most days, when you compare the charts of these two stocks they will look very similar. Bank of America has not yet really moved. Usually you only have a few seconds to act before its too late, so be quick! Sometimes you will notice a lag, and these times with a slight lag you can make a lot of money with this strategy. These will trade at a discount proportional to how far in the money the price currently is.

If you have a read on the market that says that it will be flat for a while, you probably want to take advantage of this strategy.

As long as the price remains in the money, the trader will receive the payout displayed when she purchased the option. A good time to employ this strategy is during mid day trading hours about 12 PM- 2PM EST because the market usually does not move very much during this time.

Time of year may also matter, for instance trading is usually slower during the summer months than it is during the spring. Another type of binary options strategy which is much less common is a long term trade.

Brokerages will offer options, especially foreign exchange options, which may be a month or longer in term. Traders who think that a stock is fundamentally undervalued or overvalued may take a position here, assuming that they price will tend to move in the direction of the fundamentals over the longer period of time.

A fundamental analysis involves looking at what the price of a security should be given its underlying economics and the expected future growth.

Some people may use a price to earnings analysis, or a Tobins Q, or they may look at a trade imbalance between two countries whose currency they want to wager on. There are many different types of fundamental analysis, but if you think that a security should be priced differently than it currently is, you may want to take a longer term trade with the thesis that the fundamentals will push the price towards the correct value.

Be mindful that once you enter into a binary options trade, you usually can not exit it. If market conditions change you will have to stick with your trade in most cases. The best strategy is the one that makes you money. Different trades have different preferences, comfort zones, appetites for risk, and time horizons.

Test different strategies in your demo account , and use the one that gives you the highest likely hood of making the most money. While this sounds obvious, it only works if you actually do it! Get started testing strategies today. Degree in Economics and Finance.

Live and work in Manhattan, NY, NY. To be honest this is the most helpful article about binary strategies. But what is your opinion on binary option trading robots like BinaryOptionRobot. Hello Makrui and welcome to our site. BinaryOptionRobot is one of the best signal providers at the moment. We are in the process of testing it out and we will write a review article soon. Your email address will not be published. Home Binary Options Brokers Best Binary Options Brokers US Binary Options Brokers Broker Reviews Scams.

Binary Options Strategies That Work February 17, October 26, Daniel Major Day Trading. Binary Options Strategies There are hundreds of different strategies that traders use, but these are our favorites that give us the best chance to make money. Try out OptionRobot for free, the 1 rated binary options robot:.

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