The Binary Options strategies featured here are based on technical analyses. This guide is intended to serve as a primer and a starting point. To take full advantage of these strategies you will need a level of technical analysis knowledge that is beyond the scope of this guide.
The Moving Averages Strategy
Moving averages gives you a hint as to the direction of the market; this is useful in identifying a trend. A trend is a good entry signal. A disadvantage of moving averages is that they tend to lag the market thus you need to use short period moving averages, such as a 5- or 6-day moving average, to reflect the current price action. Moving averages are the most basic and most utilized technical indicator. They are used for smoothing the price movement. Moving averages are used as a trend line which adapts to price changes, not just as a regular trend line.
The Crossover of Moving Averages Strategy
Crossover of Moving Averages is another strategy that can help you identify a trend. A crossover is regarded as a basic form of signal and is preferred by many investors since it eliminates all emotion. The standard kind of crossover is when the price of an asset moves from one side of a moving average and closes on the other. The Crossover of Moving Averages Strategy gives you the following signals: When the fast-moving average crosses the slow moving average from below – that’s a buy signal. When the fast moving average crosses the slow moving average from above – that’s a sell signal.
The Turtle Trading Strategy
The Turtle Trading strategy is quite popular among many traders; you can search the internet for explanations as to how to make full use of it. In essence, the turtles evaluate the high and the low over the past 20 days. This indicator takes advantage of the relationship between two moving averages of prices.
The Williams Percent Range Indicator Strategy
This indicator is categorized as an “oscillator” because the values vary between zero and “-100”. The indicator chart usually has lines drawn at both the “-20” and “-80” values as alert signals. Values between “-80” and “-100” are interpreted as a strong oversold condition, or “selling” signal, and between “-20” and “0.0”, as a strong overbought condition, or “buying” signal.
The Bollinger Bands and Channels Strategy
“Bollinger Bands” incorporate a moving average and two standard deviations, one above the moving average and one below. The main thing to understand about Bollinger Bands is that they consist of up to 95% of the closing prices, according to the settings. Trading Bollinger Bands can assist you to fully grasp a number of characteristics of an asset such as the high or low of the day, whether a stock is trending, as well as whether it is volatile or stable. The Bollinger Bands Strategy gives you the following signals: When prices move above the upper Bollinger Band – that’s a sell signal. When prices move below the lower Bollinger Band from below – that’s a buy signal.
Trading the News Strategy
The market is influenced by news events and by learning how to take advantage of these events you can improve your profits and prevent expensive mistakes. Many beginner binary option traders come to recognize the significance of news events only after seeing a perfectly profitable trade becomes a loss in a few minutes, while skilled binary traders foresee the move and add to their daily gains in a regular manner.