6 Styles Of Trading Strategies: Find The Best One For You
Binary options is one of the most popular trading trends since 2008. Are you willing to give it a try?
You need to know how to start trading binary options and which strategy to use.
Make use of this online guide to get all necessary basic information and best trading strategies that can be considered.
Jumping straight to trading without a strategy can prove to be disastrous for even experienced traders.
Without a strategy if you consider trading, it’s more like gambling.
There will be no logical reasoning for getting into a trade and thus it’s just betting on luck.
Whereas, if you follow some strategy that suits your style, there is high probability of making money. Moreover, according to the market conditions, you can amend your strategy to fit various needs.
Of course, you will need a lot of dedication, effort and investment (money and time), but once everything is set, you will reap regular benefits.
It is up to you to decide whether you want to trade or bet.
Trading is more with a set of techniques and strategies while betting is purely at the basis of luck.
Two Primary Binary Options Strategy Types
There are basically two types of strategies and the same are mentioned below for easy trading of binary options:
Betting model based strategies:
Irrespective of whether the traders have knowledge about the financial markets or not, they can trade binary options with this strategy.
This does not require any logical reasoning or analysis; it is simply based on luck.
Some traders will follow the news for betting their trades.
The information that is readily available is the major source for taking any decision in this type of trade strategy.
Suitable for: Inexperienced traders with little or no knowledge
Market behavior strategies:
Investment should be backed by statistical data and technical analysis.
While some trades do their own research others will look for information through various means and will scrutinize the same for any decision making.
It’s true that understanding the strategies is a bit hard but once you know how it works and has been mastered in it, there is very less chance of losing any money that is invested.
Understanding how the market behaves is crucial in predicting the price of the asset.
Suitable for: Data and market analysts, market news followers, traders skilled in technical analysis.
4 Popular Styles Of Trading Strategy
There are just 4 very popular styles of strategies that we will discuss here. Some traders follow just one style, while some traders combine multiple ones.
Our recommendation would be to be aware of all styles of strategy and use the one when required.
A. Fundamental analysis strategy:
The attributes or overall performance of the company is considered for this type of strategies.
Being a trader or investor in binary option trading everyone would be keen to know the balance sheet, cash flow statement and income statement of a company before taking any decisions.
Employee or business partner satisfaction is the other factor that is considered by traders before trading.
If there is low performance by employees who are dissatisfied with the company, the growth of the company for a certain period is in question.
Not many traders will be willing to invest when this is the case. In technical analysis, economic, industry, and company analysis is carried out.
Read more: Fundamental Analysis.
B. Technical Analysis strategy:
Among options trading this is a quite popular one. With trading becoming more computerized, technical analysis garners more and more attention.
It is mainly considered with the study of any past parameters like charts, graphs and so on and it is used for forecasting the future events.
Though the information won’t be accurate, to a certain extent events can be predicted. Technical analysis completely dependent on past market data and uses trend lines, indicators to correlate the past data to predict the future price movement.
It is quite useful to make use of this readily available information in analysis and decision making.
Bollinger bands and Moving Average are the two of the most popular indicators used in technical analysis.
Read more: Technical Analysis
C. Basic Options Strategy:
Among option traders this strategy is very common.
This strategy is crafted to safeguard the investment without incurring any loss.
Here you can choose the asset or trading currency and wait to watch the movement of the same.
Once it is seen moving in favorable to your plan, you can accordingly book the trade and make profit.
This is the most basic form of trading that is used by traders and it is well accepted by novice traders.
D. Algorithmic and signals:
In this new era, finding an app that offers trading information and helps in analysis is pretty easy.
Apps that offer automated trading services and offer signals are in high-demand.
Binary Options signals will send you regular signals that tells you which asset to trade, at what price level, and most importantly when to open your position.
Automated trading robots are a form of algorithmic trading that trades for you based on pre-programmed algorithms.
Once the app is installed to the computer, gathering data and analyzing is pretty simple.
Most traders use this for technical and fundamental analysis.
The computer will make use of these to analyze the trading technique that can be used and will make use of this to execute a trade as per traders need.
These apps can be customized as per your needs; it will thus act just like your friend who can do everything about your trading as per your instructions.
No trade will be booked unless it meets all your eligibility requirements.
Thus your investment will be safe and can be used in only quite essential ones.
At present these are the best strategies that are used by the traders.
It is up to each trader’s choice to either choose this or to come up with a whole new customized one that can cater to all your needs.
Though these are very useful and are popularly used if you can spend some time to craft strategies specific to your needs that would work best for your trading style.
One other factor to consider is the binary options broker that you choose for trading. Not all brokers are suitable for trading and hence we recommend you Binary.com, IQ Option and BinaryCent that are tested brokers for hassle-free trading:
- Regulated: Yes
- Maximum Payout: 100%
- Demo Account: Yes
- Regulated: Yes
- Maximum Payout: 93%
- Demo Account: Yes
- Regulated: Yes
- Maximum Payout: 95%
- Demo Account: Yes (Paid)
Just like investment options, trading strategies are plenty, however, it is essential to choose those ones that will give you consistent winnings.
New traders’ should research and test the strategies before finalizing and implementing into the live market.
Be smart and patience to pick the best one that suits your trading pattern and portfolio.
It is even possible to come up with hybrid trading strategies if you are technically very strong and experienced.
Don’t try to settle with something that is offered to you, instead find the technique that serves your purpose.