When trading binary options, it is one of the most profitable ways to follow an existing trend. As long as this continues, it can be traded profitably with high probability. However, also a possible trend reversal or a correction move can be determined within a binary options trading strategy with a relative probability. To this end, the Fibonacci Retracements are used, which are already included in the MetaTrader 4 platform and can be drawn into the chart.
Binary Options Strategies
Trading binary options has evolved into one of the most popular, mostly short-term, form of investment with private investors. The main reason for this development is certainly the guaranteed profit for successful positions. On the other hand, for example, Forex traders benefit tremendously from her knowledge of the behavior of markets, when it is applied for the binary options trading.
Just like the classic trading Forex or CFDs on stocks, indices, etc., success in trading binary options depends on the used trading strategy and its implementation. In the best-known trading type of binary options, the "Call / Put" trading, it is in principle only a matter of determining whether the price of the traded asset is increased or decreased when reaching the expiry of the option. To meet with high reliability in predicting whether a position should be bought (call) or sell (put), various indicators are used to help assess the future market trend.
Since some of these indicators in some brokers for binary options are not available, it is advisable to take the Forex and CFD trading platform MetaTrader 4 for the support of the used trading strategy. This can be downloaded for free on the website of the most forex brokers, and most of the indicators are already included.
In speculative trading assets, whether foreign exchange (Forex), stocks, commodities or indices, there is a golden wisdom that is known to every trader: "The trend is your friend". This indicates that it is the safest way to trade profitably if an existing trend is followed. It is therefore only logical that the trend following strategy belongs to the standard equipment for trading binary options.
The name of the strategy already makes it clear what kind of market conditions are used for trading binary options, the breakouts of an stable trend or ranging market. Although a trend stable is running in one direction, minor or major outbreaks. This is, for example, mostly the case when the market is overbought or oversold.
The strategy with support and resistance is especially strong when the price of an asset does not tend in a particular direction. Here the market often shows a certain price range in which the price will receive support on one side, and resistance on the other side, also called a ranging market. This range usually provides excellent trading opportunities with binary options.