BINARY OPTIONS TRADING STRATEGIES – Binary options are generally simpler to trade than other instruments. is is because you only need to form a view on what direction the price of the underlying asset will move. In comparison, traditional options also require you to form a view on the magnitude of any price movement.
The Double Red Strategy
The double red strategy is a short-term reversal system based on price action and resistance. e trade is planned on a 5-minute chart and is signaled when two bearish candles form following a test of resistance.1. Choose an asset and watch the market until you see the rst red bar. then wait for a second red bar.2. If the second red bar closes lower than the rst red bar, then that’s it – Jackpot.3. Usually, what happens is that the third bar will go even lower than the second bar. is is the point where you should immediately place a Put option on the asset, with an expiry time not longer than 15 minutes.
The Pinocchio Strategy
A Pinocchio bar is a candlestick bar that has a very small body and a very long wick (nose). It is also called Shooting star, Hanging man, Hammer and Inverted Hammer. As you remember, Pinnochio’s nose grew long when he was lying. e same happens with the pinnochio strategy – when the wick is longer than the body, this tells us that the market is deceiving us and that we should trade the opposite way!
e entry point varies, as some traders prefer to wait for the next candle to retrace to the 50% Fibonacci level of the Pin bar, while others enter immediately aer the Pin bar closes. A long wick indicates strong selling pressure, whereas a long tail suggests intense buying power.
The 1-2-3 Strategy
1. Aer an uptrend or at least a strong move up, look for the 1 – 2 – 3 pattern to form, starting of course with the rst peak (1).2. Now, if a counter move starts, mark the bottom of that move with (2).3. If the new move up does not surpass point 1 and starts turning down, mark the highest point of this new move up with (3).
4. our pattern is now complete. However, there is still a very important rule that must be observed: the price
must move down to break the low created at point (2). If that happens, all our conditions are met, and we enter the trade with a ‘Put’.
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