Learn How To Trade - 5 Minutes Binary Options Strategy
The 5 minutes binary options strategy is popular for evaluating the market and getting the highest possible results. A short-term trader like you can earn huge profits from the volatile market. All you need
- A regulated platform
- An effective strategy
However, finding the right trading strategy is backbreaking work that you should nail properly. So, we are here to pull you up from the dark tunnel with this article. With this knowledge, you can fix risks and reap the rewards.
Let’s bring the light!
What Is The 5 Minutes Binary Options Strategy?
We won’t dwell too much on this part of the article to clear your mind about the 5-minute binary options strategy. You all have an idea of binary options and its characteristics. As a result, the strategy indicates traders should finish the trade within a 5-minute timeframe.
It is a short-term trading strategy most suitable for scalpers and day traders. Due to the short timeline, you must make a quick decision by blending different trading indicators and strategies. On the other hand, you will get a better success rate if you know how to trade binary options successfully.
This 5-minute binary options trading strategy will allow you to analyze the market for the highest value. However, you have to do it all instantly. Everything should be in place in the shortest period, from market research to the strategy phase. Otherwise, you’ll fall flat on your face.
At the same time, traders need to determine whether to sell or buy an asset based on research. Due to its fast return rate, traders love this. You can trade multiple times in a day. However, it is not recommended to overtrade.
Let’s have a quick look at the following points:
- Simple strategy
- Easy to understand
- Suitable for short-term traders
- The highest rate of return
- Multiple trades in a day
Lastly, if you choose it, you must predict whether the selected asset will move up or down in a certain expiry time (5 minutes).
Example Of 5 Minute Binary Options
Let’s understand the process through an example.
Let’s say you want to open a position on EUR/USD, the most volatile pair. And the return percentage is 90% if you win the trade.
- The investment amount is $50
- Expiry time 5 min
- Payout ratio 90%
Now, you have to predict asset price movement using indicators and other tools. You predict that the currency pair’s price will spike after 5 mins. If the price increases after 5 minutes, you’ll win the trade, and $45 will be credited to your account.
Calculation = $50*90% = $45
Total income will be $95.
The downside is that you’ll lose the initial amount if the price of EUR/USD drops. So if you guess wrong, you don’t get anything.
How To Trade 5 Minutes Binary Options?
Trading 5-minute binary options is not a daunting task. Although the formation and process are the same, the major difference is the time frame. But, the primary task for a trader is to select an authentic and regulated broker.
The broker who has –
- Demo account facility
- An outstanding and positive review
- Hassle-free withdrawal option
- Dedicated customer support
- Minimum deposit amount
- An excellent payout ratio
Keeping all these things in mind, we have picked one of the leading binary options brokers, Deriv, as an example. The broker offers this strategy only for digital options. As a result, we have used its platform to demonstrate how to trade a 5-minute binary options strategy.
So, after choosing a broker, the next step is to register with valid information. Follow the below steps:
- Open the dashboard and select an asset
- Select a 5-minute binary options strategy
- Analyze the market
- Based on the data analysis, click sell or buy
Remember, you must have a clear understanding of trading, technical analysis, as well as individual indicators. Start with a small amount. Also, you can use the same amount for each trade to minimize risk.
The Best Indicators For 5 Minutes Strategy
The main purpose of trading indicators is to inform traders when and which instruments to buy and sell. It is a part of technical analysis. On the other hand, it produces signals. Traders usually apply indicators to a chart that help to clarify the market.
Besides detecting price movement, they also tell whether the market is trending or ranging.
- Trending – the price of an asset will continue to move in one direction; up or down
- Ranging – traders identify a range to buy and sell instruments
All you need to do is do mathematical calculations using data, graphs, and charts to identify what is happening on this financial battlefield.
On the other hand, note that using the same type of indicators won’t add any value.
Each trading indicator works differently. So, here are the best indicators for 5-minute binary options.
- Pivot Point
We will describe a few trading indicators later in this article.
Pivot Points For 5 Minutes Binary Options Trade
In one sentence, pivot points is a technical analysis tool or indicator. The indicator help traders calculate and determine the overall trend over different time frames.
Moreover, traders use this to find out the potential price action turning point in the market. If the underlying asset price is somewhere around the pivot points, either the trend will get stronger or reverse.
On the other hand, it is correct that pivot points are especially useful for short-term traders. So, this popular short-term trading indicator works perfectly for a 5-minute binary options strategy.
Bollinger Bands An Effective Tool For Binary Options Trading
Bollinger band is an effective technical analysis tool or trading indicator that determines a trade’s entry and exit points. Traders, you can use this tool to measure volatility.
Moreover, it produces signals when the market moves. For 5-minute binary options trading, it is the preferred tool to learn about short-term trading.
You can read the article to learn more about Bollinger bands. On the other hand, you can decide which market to trade in. Moreover, you can use this indicator to build multiple trading strategies based on market research.
Not only will the tool show you volatility, but it will also help you to identify overbought/oversold areas.
Easiest 5 Minutes Binary Options Strategy
We have mentioned in many articles that strategy is the greatest part of trading. You can only hold a winning flag if you know how to build a profitable strategy.
So, if you want to enjoy the rich taste of 5-minute binary options, you should know about the best binary options strategy.
Here are a few popular and easiest strategies. Let’s make your trading journey flavorful.
1. Candlestick Strategy:
Candlestick patterns allow you to analyze price action easily, so you can decide when to buy and sell. Moreover, the price chart illustrates current trends. As a result, you can observe the mood of the market and can predict the price movement of an asset accurately.
Additionally, fast-moving markets are ideal for this technical gear. So, you can use the candlestick strategy in a volatile financial environment to get a complete picture.
Hurray! the green and red lines are in your palm now!
However, the following statement is notable –
Signals on daily charts are stronger than on hourly charts. The moral of the story is that patterns generated signals are stronger on less time-frame-based charts.
On the flip side, you can increase the chart time to spot resistance and support levels clearly. Later on, drop down the timeframe, set the trigger, and fire.
2. Price Action Strategy:
Price action is a bulletproof strategy for short-term shooters. However, long-term traders can also use this method to analyze historical price changes. As a result, determining price movement won’t take hours.
If you look at the chart movement, price action patterns predict future market behavior.
The interesting fact is that the price action strategy shows minute-to-minute changes in the price.
Moreover, it mostly works in a volatile market. On the flip side, you should clearly understand how each indicator works to get optimum results. However, it is a simple form of strategy.
Additionally, understanding the four pillars of price action trading strategies is a must.
- Bullish trend
- Bearish trend
- Flat market
As it is a powerful method, anyone can utilize it for successful trading.
Note that you don’t need to use technical indicators.
3. Scalping Strategy:
Scalping is a short-term trading style mostly adapted to day traders. But it is not a terrible decision for a longer period. And the strategy that they use to conduct trades is the scalping strategy. Moreover, it is similar to the price action strategy.
However, it tells us the direction of the price, not the trend.
The ultimate goal is to make money from small market moves. Furthermore, scalping strategies focus on price action. Similarly, ignore all fundamental aspects that a trader also follows in some cases.
By analyzing the trading strategy, you can predict how the market will perform in the next few minutes or hours.
4. Momentum Strategy:
Momentum trading helps you to experience a new form of trading. It is one of the best strategies for 5-minute binary options trading. Traders mainly take advantage of the uptrend or downtrend market movement. Generally, the force a trader needs to create to move the price is defined as momentum.
However, the market price swings in the opposite direction if the momentum goes too far.
But how do traders calculate it?
Force is calculated based on how many people and money push the price in one direction. Also, it is possible to show momentum in the short term using a variety of indicators.
5. Trend Trading Strategy:
Trend trading is no longer a different strategy from momentum trading. Traders mainly take advantage of either the downward or the upward market. Moreover, any trader can use this strategy with strong trading knowledge.
Whether they prefer to be stable in the market for a shorter time or not, trend trading is the best strategy for them.
Notably, traders use both price action and technical tools to determine the trend. Learn more from here.
But when to form this?
A market trend is established when there is enough momentum. So you can predict the price movement accurately.
Best Brokers For 5 Minute Binary Options
You should pick a broker which won’t go against you. That means market manipulation is one of the greatest concerns for traders. On the other hand, the 5-minute strategy is a good pick for traders to earn money. But it is also poisonous for those with zero ideas about how this strategy works.
However, traders, you can trade with any broker with caution.
Each broker has an intuitive platform with amazing features on it.
Let’s take a look at the best brokers.
Demo trading facility
Low deposit amount
Wide range of trading assets
Leverage up to 1:100
Maximum payout 95%
Low deposit amount
Demo trading facility
Low deposit amount
Hope this article will deliver the basic concept regarding the 5-minute binary options trading strategy. The core idea is that one should predict the price of a particular asset after this time frame.
If you are an active binary trader, this trading strategy could bring success. Short-term contracts are exciting when you know how to open and close a deal.
So, if you want to bring success in trading, sign up for a regulated platform and use the demo tool to practice.