2. Introduction Thank you for downloading this report, which we
hope will help establish a stable and profitable trading path for
you, both now and in the years to come. We have reviewed many
strategies and have filtered the list down to the ones that best
fit binary options trading. Of course, a tried and tested strategy
is not the only requirement for successful trading. Having the best
tools, the most appropriate brokerage relationships and the ability
to remain disciplined while executing the strategy are also
critically important. We hope you will find this guide stimulating
and informative, and we wish you every success in your trading
career! This is an abbreviated version of our full report The
Magnificent Seven. Get your copy for free by visiting
http://binoptional.com/hello.html DISCLAIMER: it is possible to
lose as well as gain trading binary options! This guide is for
information only. The author and publisher accept no responsibility
for decisions made by users of these strategies, nor any
consequences of those decisions. You should seek financial advice
before deciding to trade binary options. Demystifying Binary
Options Binary options provide a way to engage in financial asset
trading, and, as their name suggests, they are binary in nature ie
they only allow for one of two outcomes: win or lose. If you lose,
you lose the entire amount of your investment, while if you win,
then you gain a further profit percentage as a result. The
percentage gain is normally very high compared with conventional
investments, typically 70% or more. Herein lies the attraction of
binary options: in a short period of time it is possible to make
gains of up to 81% without having to provide a large capital
outlay. Trading is possible 24/7 and there is usually no commission
to pay on profits In the rest of this report we will outline the
principles behind the best strategies. Always remember that the
market comprises traders like you, applying their own ideas and
strategies. You need to be aware of how they may be thinking even
if you dont apply the same strategy yourself. To help you choose
the strategies that might work best for you, weve ranked them with
two indicators: Skill Level (1 5) and Risk Level (1 5) where 1 is
low and 5 is high in both cases.
3. Strategy 1 Economic Newsfeed SKILL LEVEL: 3 4 RISK LEVEL: 3
No doubt youve seen the daily news outlining some announcement of
an economic indicator that has panicked the markets, and all hell
breaks loose. This strategy makes use of the fact that the timing
of such news is well known in advance, even if the content of the
news is unknown until its released. The types of events that can
trigger market movement include National Interest Rate
announcements, US Trade Balance, US Non-Farm Payroll and so on. The
release dates and times of major announcements are well-known
consult your Forex broker for an economic calendar that shows when
theyre due, or consult Google. We should stress that you dont need
to understand all the ins and outs of the content of these economic
news releases (although the more you understand the better youll be
able to predict market behavior) youre just going to use the event
as an opportunity to trade. The greater the volatility in the
market, the higher the chances for good profits. The trick is to
recognize that just ahead of a major announcement, the market tends
to quieten down and stabilize. During this period trading is
operating between a ceiling of high resistance and a floor of
support, and usually in a narrow range. As a breakout happens,
there is then an expectation of a surge of momentum that continues
for a while during which trading can be lucrative because the
momentum provides a measure of relative certainty about which way
prices are moving. The strategy is hence implemented as follows: 1.
Select an appropriate newsfeed release using the calendar 2. Select
a related currency pair that is trading within an easily-
identified range ahead of the release. Make sure you can see the
floor and ceiling of the trading range 3. Once the prices surges 10
pips above the ceiling, or 10 pips below the floor, execute a 60
second CALL or PUT binary option respectively on this binary
pair.
4. 4. Be aware that pricing can oscillate wildly during such
times so be vigilant in your trading decisions. Please be careful
that you are timing your trades to coincide with the timing of the
news announcement in its own timezone. Get this wrong and you will
likely go badly astray! Finally, even if you dont adopt this
strategy, its wise to remain vigilant regarding the impact newsfeed
announcements can have on price movements. Your careful plans could
come unstuck if theres a destabilizing announcement just as you
make your move. Strategy 2 Waves and Straddles SKILL LEVEL: 2-3
RISK LEVEL: 3 The wave or straddle-based strategy adopts the
assumption that price changes follow a wave-like pattern with a
series of crests and troughs, each of which signifies a fundamental
change in trend. They work best when there is comparatively little
volatility to interfere with the pattern of repeating waves. This
is possibly the simplest strategy to understand since the idea is
simply to identify a price trend reversal and then PUT or CALL
binary options in line with the new trend. Hence if the price has
rebounded against a price ceiling and heading downwards, execute a
PUT option, and vice versa if the price is trending upwards.
Clearly to master this requires the ceiling and floor to be
identified along with a new rebounding price trend.
5. The steps to executing this approach are as follows: 1.
Identify a suitable asset whose price is trading within a
well-defined range and which has been doing so for some time. Make
sure you can identify the trading floor and ceiling against which
the price has rebounded several times. You should look at trading
charts that track movements over several weeks. 2. In line with the
advice in the Newsfeed strategy, make sure that NO news is expected
around the time you will be anticipating trading. It would be
disastrous to accidentally neglect a news item that sends the
market for your chosen asset into turbulence! 3. Wait for the next
bounce, and then confirm by checking that the next candlestick
closes above the identified floor, or below the ceiling. 4. If all
is good, open a trade, by executing CALL or PUT options if the
price is rising or falling respectively. Strategy 3 Machismo
Trading SKILL LEVEL: 5 RISK LEVEL: 5 This approach is for one-touch
binary options and adopts a more aggressive style of trading which
may not be suitable for everyone. Nevertheless it can prove very
lucrative when executed with confidence, and works best when there
are high levels of volatility. Because the risk is high, this
approach is definitely one for those with more experience and with
a temperament to match. The approach is simple: with a one touch
binary option you are forecasting that the option asset will attain
a given value within a given length of time. If the value is
attained at any point during the option period, you are in the
money. If not, you will lose your deposit. If the target is higher
than the starting price, then you would instigate a CALL one-touch
option, and if the target is lower, then a PUT option. The return
on the option is determined by how close or far away the target is
from the opening price. Of course, your judgment about the
likelihood of a price attaining your target will be informed by
many factors. For example, you may consider, because of world
events, that the euro will continue to weaken against the US
dollar. In this case you may consider placing a PUT one-touch
binary option against the EUR/USD. Trading is normally possible
during the trading day or even over the weekend and your broker
will provide a range of one-touch options for consideration. The
steps to implementing this strategy are as follows: 1. Identify an
asset that is displaying volatility 2. Note the target price, the
rebate ratio, the payout ratio and the expiry time 3. Place a
deposit and initiate either a CALL or PUT one-touch option
depending on whether you think the asset will rise or fall in value
4. Monitor the trade!
6. Strategy 4 - Corrective Strategy SKILL LEVEL: 2-3 RISK
LEVEL: 3 The corrective strategy applies when an asset undergoes an
unexpected surge or drop in price range and a gap opens up between
the trading range before and after. You can easily see when this
has happened when the candlesticks dont overlap. The opportunity is
not in the surge or fall, but later on when the price trend
reverses and starts to move back to the level before the surge (or
fall). This is termed a correction, hence the name of the strategy.
The steps to execute the strategy are as follows: 1. Identify the a
gap that has opened up between consecutive candlesticks on the
assets price chart 2. Once the price trends back to be inside the
gap that opened up, then execute a trade (a CALL if the price is
rising and a PUT if it is falling) 3. Close the trade when the
option expires or, if the gap has been filled, explore whether the
trade can completed prematurely. This is to mitigate risk if the
expiry time is still some way away. Gaps often open up at the start
of the trading week, so its worth reviewing whether there are any
fundamental reasons why a gap should have opened up before opening
a trade. It seems that once the price moves back into the gap
region of price, there is often no support or resistance for it to
continue back into the former trading range, and hence this
strategy can be quite profitable once a suitable gap has been
detected.
7. Strategy 5 - Retraction SKILL LEVEL: 2-3 RISK LEVEL: 3
Retractions are generally described as temporary price dips within
an established price trend or channel. They are characterized by
being an interruption to the trend, as opposed to being a more
serious and longer term reversal. Obviously it is important to be
able to recognize the difference between the two! Because a
retraction is often the result of a minor trading perturbation
caused by a small group of investors taking profits or capping
losses for example, they often occur after a previously experienced
large price movement. The idea then is to look for a minor bounce
within a trading channel, and then execute a CALL or PUT as the
price rebounds back into the channel. The trade should be in line
with the direction of the channel. So if the channel is trending
upwards, then as the price bounces off the bottom line of support
of the channel, a CALL option should be executed. Note that if the
price bounces off the top line of resistance of an upward pointing
channel, a PUT option would not be wise, according to this strategy
because the trade is not in line with the direction of the channel.
The steps to execute this strategy are: 1. Identify a trending
channel, either upward or downward, it doesnt matter which 2.
Create the trendlines of the channel by connecting the recent highs
with a line and the recent lows. The trendlines should be
approximately parallel. 3. After a bounce, confirm that the price
has trended back into the channel in line with the direction of the
channel (see comment above) 4. Then execute a 60 second option, PUT
or CALL depending on whether the price trend is up or down
respectively. The key to making this strategy successful is being
able to identify stable trendlines. If such trends are not
immediately clear with a particular trading asset, its better to
move on and look at other assets or strategies.
8. This is where this Slideshare download finishes- thanks for
reading! To read the rest of the report, get more tips, tricks and
secret resources, please visit the following link:
http://binoptional.com/hello.html