Binary Options Strategy Guide 2020 - Step by Step to Trade

Binary Options Strategy Guide 2020: The Way to Good Trade Knowing & Using Opportunities Act now with the necessary expertise.

We have already presented several strategies. We focused on different market phases. Today we want to act a strategy from the first to the last step. We will choose all the tools we are given to execute a trading strategy - from analysis to the right entry and choosing the right term for the option, following three basic steps:

  1. Analysis
  2. Choice of entry point
  3. Define the term for the option

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Analysis

For the analysis we choose the market technology. Then we have to determine the market phase we want to trade. We choose a strategy with which we trade trends, but the phase should be more or less sideways. This is important in that short trends that we want to use always alternate. In addition, trends within a sideways phase are consistent, so that we have an indication of the choice of the term.

For our analysis, we need the following conditions:

  • A sideways phase at 4-hour Basis
  • Several highs and lows
  • RSI divergence

For our example, let's take the USD / JPY currency pair, which is currently fluctuating within a slight downward range, On the 4-hour chart, we can clearly see how the currency pair has been within the range since January 20. These fluctuations form short trends within the range. So the first point would be met. We can also see several highs and lows.

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Then we try to identify an RSI divergence. Since, as already noted, sideways phases also consist of short trends, we can use the Relative Strength Index to measure the strength of the current trend. To do this, we set a period of (5) because these are very short-term trends.

RSI divergence occurs when the price, for example, is at a lower low while the indicator is at a higher low displays. The divergence is a filter indicator that should show us a reversal.

Select entry point for the purchase of an option

After we have carried out our analysis, we still need a good entry point, We make this dependent on candle patterns. To buy a call option, we need a 4-hour candle that points upwards from the reversal. The option is bought as soon as one of the next candles closes above the high of the first candle.

In the first case, it would only be the third candle after the reversal, while the second candle already makes the high clear in the next case

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Profit from movements in currency

Specify the term for the option

So far so good: The strategy is and does not look too complicated, However, the question remains open as to which term you have to choose in order to have a certain chance on your side. The time should definitely not be too short. Since we are trading on a 4-hour basis, the price should have some breathing room. At this point, the sideways phase presents itself as a model indicator. Retrospectively, as long as the phase persists, we can figure out how as long as a trend continues. In this case it is at least 8 hours, i.e. two 4-hour candles. Our runtime must therefore be between 8 hours and 12 hours. 12, or at least three, 4-hour candles would be better.

However, not every broker offers the free choice of terms. You should therefore look for a broker that allows trading this strategy. Although the broker is very flexible in terms of terms, the terms are not freely selectable for all option types, but in our case and in relation to the USD / JPY currency pair, we could use the touch option or the achieved / not achieved option choose between 1 and 10 hours with free choice of duration. We choose 10 hours and trade.

Trading Binary Options - Step by Step

There are countless different strategies for trading binary options, but what does trading really matter? What do traders absolutely need to know about trading in highly speculative financial derivatives? Say: How does binary options trading work? In the following we have summarized the most important information and show what you should consider and how you can get to your first trade in just five steps.

Conclusion

In summary, the trade can be summarized of the presented strategy as follows: 1. Analysis and identification of a sideways phase on a 4-hour basis2. Identification of a possible reversal using the RSI indicator3. Determining when to buy using candle patterns4. Determining the term of the option using past trends within the sideways range5. Find a broker that offers a good range of terms6. Trading It is important to be meticulous when trading binary options. This reduces the trading frequency and increases the chance of making good decisions.

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