Today I would like to present another possible strategy for trading binary options. A strategy based on market technology is particularly useful in short-term trading. Only when you are very familiar with monetary policy and the weekly economic indicators should other strategies be preferred. In most cases this is not the case and is not necessary. Although a certain understanding of the markets is always helpful and for this reason I give a review and outlook on upcoming events on Fridays. Advertising slogans such as "You absolutely do not need to know about these products" are simply advertising slogans that you should not take as seriously.
The market technology-based trade takes advantage of the fact that certain patterns are recurring are and with certain brands with increased volume is to be expected. These patterns are repeated due to the state of demand and supply, leaving a certain forecasting option open. Of course, these patterns do not produce 100 percent forecasts, but in many cases a higher probability of a price trend can speak for trading according to this technique.
There are patterns (which are also called patterns) that are high or also indicate a course low, patterns that indicate a sideways phase, and patterns that serve to identify trends. There are also special patterns that are described depending on how the chart is displayed. Examples include the candle or bar or bar. There are also technical indicators, but in the end they are in most cases only a different representation of the price chart, with the exception of volume-dependent indicators.
All of these patterns help to develop a trading strategy or technology based on market technology, because they represent important price ranges graphically. Which of the technical aids to use is up to the dealer. Some need a whole arsenal of tools, others only the price chart, some only the stars. But having fun, if you are familiar with the patterns, the development of a trading technique will not be particularly difficult. The following is an example:
Trading within a range
As soon as we have identified from our analysis that the price is within a range (both a sideways range and a trend can be Range), we naturally have the possibility to speculate that the price will remain within this range. Granted, there is always a risk that the price will break through this time, but ultimately everyone who trades in the financial market knows that it is a business with risk.
Now there are several options. Either we buy a put option each time at the upper limit (which by the way is called "resistance") or we buy a call option at the lower limit (which is called "support" in jargon). Based on the sideways pattern, we assume that the price will turn in the other direction again at the respective limit. This technique can be implemented at all time levels. Of course, not every example is so representative, but it depends on the dealer to find good setups. Such put / call options can be traded through different brokers
The second option would be to buy a boundary option. The type of binary options that allow positive returns to be made provided the price remains within a fixed range after the time has elapsed. This option is offered by the broker, for example. What is striking is that this type of option is very cheap and, compared to put / call options, has a long term of one day. In addition, the band is specified by the broker.
The option offered would give us a return on use of 1900% if the trend was positive. Sounds good, doesn't it? But be sure. Everything on the chart looks easier than it really is. Trading according to market technology, especially in sideways phases, also requires experience. Therefore, one should carefully observe the behavior of the prices and their dynamics within a range in advance.
How can you optimize range trading
If we consider our first example, we will present realizes that the times when we could trade puts or calls are not so easy to analyze. How do we get it now not to get in too early and not too late. You can also use a technical analysis, namely the analysis of the candlestick formations.
One of the most famous of these formations is the hammer. This candle shape with a long wick and short body signals a trend reversal. So the first idea would be to look for such a formation at one of the border areas (I then updated the first example.
These candle formations indicate that an extreme demand for a currency has developed at this price level. In our example, we chose representative formations, but with some experience and skill, this trading technique can be an advantage, especially in short-term trading.
Admittedly, range trading is not the easiest way to trade, but with With the help of market technology and a good selection of the formations, it is quite realistic to make successful trades in the long term.Thanks to the different types of binary options, there are even several possibilities, for example the cost advantage of boundary options.