Binary Options Strategies – The Key to Success
“Binary” means having two parts. Binary options trading consists of only two possibilities which depends on right prediction. There is a “call” option or a “put” option. A trader needs to cautiously choose between the call or put option. If the prediction is about the rise of the asset price, then it is “call” option. If the prediction is about the fall of the asset price, then it is “put” option.
Novice investors find binary options lucrative and simple, mainly because the options allow only a specific guess of an event happening or not. Making a straightforward prediction about the market direction gives multiple benefits which include short-term expirations, candid risk/reward profiles and much more. A variety of binary contracts are available for traders. Indices, Forex, commodities and stocks could be traded.
A binary options signal could be an email or SMS alert guiding a trader about entering a new trade. Daily signals have an expiration time. They expire as soon as the asset’s market is closed. Also, the asset’s final price is announced upon expiry. There is also an auto trading technology, which helps to avoid manual intervention. This service is also known as auto trader.
There are various Binary Options Strategies that give signals about the market direction. It involves technical analysis. The strategies include moving averages strategy, cross over of moving averages strategy, turtle trading strategy, Moving Average Convergence Divergence Strategy (MACD), Williams Percent Range Indicator Strategy (Williams %R), Relative Strength Index Strategy (RSI), Bollinger Bands and Channels Strategy and Trading the News Strategy.
The most commonly used Binary Options Strategies
Moving averages are used to identify a trend line that adapts to price changes. The Moving Averages strategy provides the buy or sell signals. If the closing price moves above the moving average then it is a buy signal. If the closing price goes below the moving average then it is a sell signal.
Cross over of moving averages strategy
The standard crossover is when the price of an asset moves from one side of a moving average and closes on the other. The Crossover of Moving Averages Strategy gives the buy or sell signals. When the fast-moving average crosses the slow moving average from below, it is a buy signal. When the fast moving average crosses the slow moving average from above, it is a sell signal.
The Moving Average Convergence Divergence Strategy (MACD)
The MACD strategy is another important indicator which is helpful in identifying trends. This indicator takes advantage of the relationship between two moving averages of prices. When the signal line crosses the MACD from below, then it is a buy signal. When the signal line crosses the MACD from above, then it is a sell signal.
Relative Strength Index Strategy (RSI)
The Relative Strength Index strategy is overbought/oversold signal created by Welles Wilder. When the RSI crosses the 70-line overbought-zone from above, then it is a sell signal. When the RSI crosses the 30-line oversold zone from below, then it is a buy signal.