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Top Binary Option Strategies

By November 18, 2016 No Comments

stock trading beginnersDespite the fact that a mere guess could result in a profit when trading binary options, the fact remains that trading systematically will place the trader on the path to consistent profits. Strategies are important in all forms of market trading, as they provide a solid plan for maneuvering the market successfully. Many of the top binary options strategies are simplistic in design and easy to execute, meaning that even beginner level traders can reap the benefits of trade planning.

Scalping

Scalping is a prime example of a binary options strategy that can easily be used by all traders. With some forms of trading, scalping is frowned upon and discouraged, but this is not the case when trading binaries. In fact, many binary options platforms make it quite easy for traders to scalp by providing them with super-short trade expiry times that make it easy to get in and out of the market quickly. In addition, many brokers accept low minimum investments. Fast, low-dollar trades allow traders to protect their account funds while steadily increasing their returns.

Spread Trading

Spread trading is another option to consider. With binary options trading, spread trading equates to betting on the direction of price movement. For example, a vertical bullish spread is a spread where an underlying asset with a lower strike price is purchased and an underlying asset with a higher strike price is sold. This would be done with the expectancy that the asset price is going to increase. Selling option positions is an option that many binary options brokers now provide to their clients. There are some limits and restrictions, but the ability to sell open options has been extremely beneficial to those who trade binaries.

Reverse Scalping

The option to sell open trades can also come into play when using a scalping strategy as mentioned above. Scalping is often done in trading platforms using short expiration times of five minutes or less. However, when selling is an option, it can also be done using longer expiration times. The goal is to enter the trade and then sell as soon as the asset price has moved into a position of profit. Simply open the trades, monitor the price movement, and then take action when the price moves in the desired direction. This type of binary options strategies allows for smaller amounts of profit to be locked in well before the trade period actually draws to a close.

Tunnel Trading

Tunnel trading is considered to be one of the top binary options strategies of all-time. Tunnel trades are suitable for markets which are consolidating. Typically, we find that asset prices will be trending from horizontally when the market is awaiting a major piece of news or the release of important financial data. Under these circumstances, the market is unsure of the next direction of movement. For the binary options trader, this is the perfect opportunity to trade on a lack of price movement rather than a trend. A quick look at current charts will reveal times when a tunnel trading strategy should be used.

Conclusion

Although it is possible to trade without using one of the top binary options strategies, it certainly may not be wise. The success story of anyone who has profited greatly through options trading is one that will include a discussion of strategy usage. While there is no one-size-fits-all strategy, there are plenty of methods that have been well-tested and proven to work. Each trader should create a strategy tool box and make use of the best tools to fit current market condition. When a solid approach to binary options trading is taken, success is certain to be imminent.

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