Any trader looking forward to taking part in binary options trading must first ensure that they get the required know-how in order to at least know what to do and when to do it. But that doesn’t mean that one has to be an experienced trader for them to engage in binary trading. Binary options strategies are among the basic things that any smart trader must seek to understand first before making his investment.

Learning and making sure you’re conversant with these binary options strategies is something whose importance cannot be overemphasized.

That is for the reason that you will use them in your trading day in day out.

There are many binary options strategies out there today, but you don’t have to necessarily learn all of them but just a few which you’ll employ in your trading. Some of the strategies that we’ll briefly discuss in this piece include:

  1. Trend strategy
  2. Pinocchio strategy
  3. Straddle strategy
  4. Risk reversal strategy
  5. Fund analysis strategy

But let us first understand the basic concept of binary options trading before delving into the strategies used in this trade.

The basic concept of binary trading is to predict the direction which the price will take, either go up (call) or go down (put). And, it is good to keep in mind that there are only two possible results in binary options. Also, in case that you are new in binary options, remember that one of the secrets of making it big in this trade is employing the strategy that you’ll find to be easy, at least according to you.

Minimizing risks

Using the best strategy will go a long way in helping you make more returns in the long run. You will use the simple techniques available to aid you to learn the signals in the trade so as you can make right and informed choices in your trading. At the same time, you have to minimize the risks that you face each time you trade and below are some outlined principles to help you in doing exactly that:

  • Practice using your favorite strategy with just a small amount first. Doing that will help you see if it will actually yield the results you are looking for. If it is good, then you can invest more but if it is not good, try out another strategy.
  • Do not invest all the money you have in one trade as you could lose it all. Other experts also say that it is essential to operate more than one trading account.
  • Review the trend of the asset you are looking forward to trade before you can start the actual trading.

Best binary options strategies

There are various strategies used in the world of binary options trading. Some are easy and some are not that easy. That is a fact that has to be made clear. Therefore, you must always go an extra mile to ensure that what you end up using is nothing short of the highly rated strategy. Below are some of the best binary options strategies that you can consider in your trading.

Trend strategy

Trading with the Trend strategy has been termed as one of the simplest and functional approaches to binary options trading. It can be used by beginners as well as experienced traders. The Trend strategy is based on some three exponential moving averages with the periods of 21, 50, 100 and stochastic indicator. This strategy is basically intended for the intraday trading of binary options.

It is also called the bull/bear strategy and it is all about monitoring, increasing, decreasing and the straight lines of the asset that you are trading. In the event that there is a straight horizontal line and you predict that the value of the asset will go up, then you are advised to use the no touch option. In the event that the trend lines display that the asset value will go up, then select ALL but if the trend lines display that the value of the asset will go down, then select PUT. This is the same ideology as the CALL/PUT option only that in this case you are supposed to choose the value of the asset that it is not likely to reach before a certain period elapses.

Pinocchio strategy

The Pinocchio strategy is used when the value of an asset is hoped to go up or down drastically. In the event that the value is hoped to go up, then choose CALL but if it is hoped to go down then choose PUT. This is the most common strategy used in demo accounts.

Straddle strategy

This is the best strategy to use when the market is highly volatile and just when there is important news related to the trade that is about to be released. Straddle is one of the most commonly used strategy and one that yields the best results in the market today. It helps the trader avoid the CALL or PUT choices but instead use them both for the asset they want to trade. The main idea is to make use of PUT when the value of the asset goes up but soon about to drop. Once the downward trend commences, then you can select the CALL option but also hoping the upward trend will start again soon. The reverse can also be one where you place the CALL on those assets that have a low value and PUT on assets that have a high value. This is meant to increase the chances of at least one trade being successful and, as a result, you will not lose all you had invested.

Risk reversal strategy

Risk reversal strategy is yet another highly rated strategy. Traders who have used this particular strategy stand high chances of making good money at the end of the day. Its main goal is to lower the risk that comes with binary options trading and, at the same time, increase the chances of making more profits. The risk reversal strategy also uses the CALL and PUT options but at the same time on one asset that you are trading. This is a great strategy to use when the value of the asset keeps going up and down.

Fund analysis strategy

The fund analysis strategy is mostly used by traders who want to gain more understanding of the kind of asset they are trading. This is in a bid to increase their chances of predicting accurately in the future when there is a price change. In this strategy, you have to do a thorough review of the financial records of the company like the earning reports; financial statements and market share because it is mostly used when one is trading stocks. This is to help the trade understand how the asset has been doing in the past so as to be able to predict how it will do in the future with a bit more accuracy.

Binary options strategies – conclusion 

The above discussed strategies are all suited for different assets and will work for different traders depending on what you want to achieve and what works best for you. But remember that there are those strategies that are suited for new traders while others are a bit more complex and require a more experienced trader.

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