Binary Option Alliance

Your Edge To Success

Month: June 2015

Binary Options Trading Advice

The best binary options trading advice you’ll ever get

The recent enormous growth of the binary options market has attracted many new customers from all walks of life. The idea behind the heavy marketing displayed by binary brokers is that everyone can get rich from trading fast paced options.
Obviously this is the message almost each and every broker wants you to hear, but in the binary business it has been ever more hammered in the mind of potential customers since you get to start with so little money (from $10 sometimes) and don’t need any specific program or set of skills.
Since it’s so easy to access, many have been lured into thinking that binary options trading is extremely easy and a great way to make some extra bucks with little to no risk. Of course, risk is inherant with everyform of trading and binary options is no different. Trading on the financial markets is one of the most lucrative oportunities available today and binary options makes it accesable to the masses but before you go out and deposit with a broker, make sure you go in with a plan before you become another statistic.

The best advice you’ll ever get

Here is the advice, write it down, hang it on a wall, tattoo it on your arm (no, please don’t do that): You should treat binary option trading like a business. Every trade should be analyzed and managed as if your life were depending on it.
Binary trading is not super easy. You won’t get rich over night. You won’t make thousands of dollars from a $10 account in 2 weeks. You won’t win every single trade.
Trading, whatever the form (binary, forex, stocks, etc.) is a business. You need to go in with a plan and follow it to a T.
Before jumping head first into the binary trading world, sit down and write a decent plan. In this plan should be the following:
– How much money can I safely invest?
– How much money do I want to earn per month (be reasonable)?
– How much money can I risk per trade?
– Which strategy will I use, and why?
– How will I test the validity and profitability of that strategy before investing any money?
Once you have answers to these questions, you’ll be ready and far ahead of anyone who jumps into binary trading with big dreams but no plan at all.

A simple binary options strategy that works

Binary trading, in principle, is a pretty simple way of trading. It’s easily understandable, doesn’t require much knowledge to place a few trades and is extremely easy to access. Anyone can make an account within a few minutes, deposit a few bucks and start trading.
Obviously the trouble comes when it’s time to actually make some money! That’s where real traders will have an edge versus the recreational “let’s deposit and see what happens” types of traders.
Building a working and profitable binary options strategy can be a drag. The way most traders do it is by opening an MT4 charts or Freestockcharts.com (any broker) and fashion a strategy that relies on a few indicators plotted on these charts.
In this article, we’re going to save you the trouble of finding out what works and lay a sample out for you.

Strategies that work in binary trading

The best binary trading strategies are momentum based. This simply means that you should be looking for strong short momentum outbursts in the market and trade these off the binary market.
The way to spot a momentum trade is to have simple indicators and/or lines plotted on your charts. The purists will tell you to only rely on support or resistance breaks (and they are right), but that might be too difficult for you if you’re a beginner.
What you could do instead is plot an 18 EMA (exponential moving average) for instance. Each time a candle breaks the EMA and closes on the other side, you place a momentum (ie: short term) trade on your binary platform.
What were aiming to do is take advantage of the people doing the exact same thing in the “real” market, and basically take advantage of all the big positions the big players place when this happens, which pushes the market further. You capitalize on that strong market move, manage your risk and then move on to the next trade.

Trend Trading Binary Options

Going with the Trend

Trend trading– As far as “tricks” in trading go, trading by following trends has to be the oldest one in the book. Following the trend is THE go-to advice experienced traders will give to anyone wanting to start trading.
Although it is good sense to do so, some traders still get confused about the way it should actually be applied. In this article we’ll go over what trading with the trend is, and how to spot trends easily.

What does Trading with the Trend mean?

Trading with the trend means exactly what you think it means: it’s spotting a trend (a long term direction in the market) and following it.
Basically you want to spot whether the market is going up or down, and place your entries according to that direction.
The general idea is that usually long term trends tend to last… well, a long time. Therefore if you were to jump into long trends at the start, you could potentially ride them until the end and make a boatload of money.
It also means you can add to your position gradually every step of the way. This obviously depends on the type of strategy you’re using, but it should be your goal to always place your trades in favor of the dominant trend in order to put the probability of winning the trade in your favour.

How to Spot the Trend?

how to spot a trend in binary options

Obviously the first issue for new traders is to actually spot the current trend. Markets can go 3 different ways: up, down or sideways. Even though there are only 3 solutions, things can get confusing so let’s define how we look for trends once and for all.
First step is to open your charts, and zoom out. You don’t want to be seeing big candles or bars. Zoom out until you can see quite a bit of data on your charts.
Now sit back, and look: where is the market heading? Think like a 5 year old. If you were to ask to a 5 year old, “Where is the market going?”, what would he say? If you have a 5 year old, ask them! Its quite easy to spot when you don’t over think it.

How to Trade the Trends in Binary Options

Trading and following the trends is probably the single best way to make money in the markets. It has always been the strategy that big investors use, and this since the very early days of market trading.
Trend trading in the traditional markets (forex, stocks, etc.) is fairly straight forward. All you need to do is spot the current trend, build a strategy that allows you to jump in it at profitable points, and apply your rules the best way you can.
In binary trading though, it can become a bit more difficult. In this article we’ll see why it’s more difficult to trade the trends in binary options.

Trend Trading in Binary Options

binary-options-trend trading

The difficult part of trading the trends with binary options is that you’re locked into a trade for a certain amount of time, with what seems to be no power.
Let’s say you were to place a long term trade in the regular forex market, following the current up trend. It would be easy for you to regularly check up on your trade and adjust your risk. You could for instance move your stop loss up, close some part of your trade to limit your risk, or even just close the trade if you feel like you’ve taken all you could get.
In binary trading, you simply can’t do that, hedging your trade if the trend goes against you is the a good way to minimize risk, You can also manage your trade for a double profit setup, but that is more suited to a non trending market situation. Once your trade has been placed, you have to wait for the expiry to kick in, however, with some platforms you have the ability to sell off your position before your expiry, at a small loss if the trade goes against you or for a profit if the trade is going your way, which is essentially  the same stop loss system regular forex traders use without all the complications.
You definitely can make money following the trend in binary, you just have to adapt to the market conditions and manage your trades accordingly.

Trend trading clock

Finding the current trend is one thing, figuring out which expiry you should take is another. Try to think in absolutes: where is the market likely to reverse or slow down, and how fast is the market moving? (volatility) If the market is moving in quick successions of high numbers of pips, you might be better off placing a short term expiry on your binary trade, If the market is moving very little and is not showing many signs of being volatile then its wiser to extent your expiry times.
There are a plethora of ways to use the trend in order to trade binary options profitably. It is one of the simplest and most reliable chart patterns and can and should be integrated in all strategies while trading. If you have any questions about using the trend to trade binary options or would like to share your story of trend trading please do so in the comments section.

Day Trading Binary Options

Day trading – A Love Hate Relationship

Ha, day trading! Who hasn’t heard about day trading? It’s pretty much one of the first things a new trader reads about after the first boring articles about support, resistance and EMAs.
Day trading is the dream for many traders. It’s the skill of being able to make money in short term trades, sometimes tons of money within a few minutes.
Day trading is also the pitfall of many cowboy traders who think they are fit to risk enormous amounts in high variance trades. Most of the times these traders do it for the show, for the adrenaline pumping through their veins, more than for the money they could potentially earn.
Should you, or should you not, day trade? That’s the question we’re going to ask ourselves now.

Why you shouldn’t be day trading

day trading-why you shouldnt be

Day trading is extremely risky. Like we mentioned earlier, day trading consists of taking high risk positions for a short amount of time hoping to cash in on very quick movements in the market. Most day traders don’t hold their trades for more than an hour. It’s extremely fast.
If you’re new to trading, resist. Do not day trade within the first year of investing in the markets. It’s tempting, but it’s going to cost you. A good alternative would be to day trade with a demo account. See how it feels, have fun, but don’t invest any real money in it.

Why you should be day trading

Day-trading- why you should be

If you have the experience (and have developed a skill for it by, for instance, practicing on a demo account for a few months), day trading can be very profitable. It should be encouraged to have both a day trading and a long term trading strategy in your arsenal.
Once you spot a long term trend, you could place a long term position which will give you profits over time, and at the same time take small day trading stabs at the market for more rewards.

How to day trade in the binary options market

Day trading, the art of opening and closing profitable trades within the scope of one day maximum, is all most binary traders can talk about these days. The fact is that binary trading and day trading are extremely well correlated.
Binary trades can, by definition, be opened and closed within very short amounts of time. Some experienced traders can place numerous trades per day using expiries as low as 30 seconds. This means that each time they open a trade, 30 seconds later it closes at a loss or a profit. It’s an extremely fast form of trading and is becoming very popular.
Coupling day trading and binary trading can be very profitable, but you have to know what you’re doing. In this article we’ll go over a short plan (the basics) that should allow you to be prepared to dive into this exciting world.

A plan to day trade in the binary options world

Binary-Options-Day-Trading
The first thing you need to settle on while day trading binary options is a strategy. Most binary traders use momentum based strategies, which means they enter the market when there’s a strong push on either side of the market, hoping to capitalize on that quick movement.
Once you have found a strategy that works for you, you need to decide which expiry you want to trade on. It’s important not to take the lowest possible expiry just because you feel like you’ll be able to place more trades. More isn’t always  better. Find an expiry that works in your brain (you can handle its pace mentally) and that fits the strategy you’ve built.
Anywhere between 5 minutes to a couple hours are good day trading expiries, especially for momentum based trades.
The last thing you need to do is plan your money management. Give yourself a stop loss for the day, (ie stop after 2 losing trades) and try to trade on risk free capital as soon as you get the chance.

 

Are you Day Trading Binary Options? Whats your experience with day trading? Let us know in the comments section below!  Happy to answer any questions you may have regarding the topic;)