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The probabilities involved in the binary options equation mean that to achieve all of that, one has to be able to finish most of their trades in the money. In this article, we’ll take a closer look at some of the most popular technical analysis-based strategies that actually work. These strategies are also some of the simplest, which not only means that they are also accessible to beginners, but can also be applied to short-term options.

trend tracking It is perhaps the most elementary of all binary options trading strategies. Price action always goes through several uptrends or downtrends, regardless of the type of asset we are looking at. The market rarely stagnates, so obviously there are all sorts of trading opportunities in these trends. All you have to do is spot up and down trends and draw the trend lines. Experienced traders don’t even really need trend lines to be able to trade trends.

What this strategy boils down to is: what is an uptrend and what is a downtrend? An uptrend is a general upward movement of the price signal, characterized by higher and higher lows and higher and higher highs. A downtrend, on the other hand, features lower and lower highs and lower and lower lows. Trend lines can be drawn by joining two of the successive highs in the case of a downtrend, and two of the successive lows in an uptrend. The features to be placed are self-explanatory. In case of an uptrend, the call option is in order. In case of a downtrend, the Put option should be bought.

The 60 second strategy based on MACD It’s a great way to take advantage of the types of fast, instant gratification focused options that most binary options brokers feature these days. This strategy is based on the moving average convergence divergence indicator, which is the only technical indicator used for this approach. The MACD must be used with certain settings for this strategy to work, and it will be displayed as a blue line following the white line of the price signal. Every time the MACD line crosses the price signal line, we have a trade signal. The MACD essentially shows the momentum of the price change, so its fluctuations represent something of a prediction in this regard. If the MACD line crosses the price signal from below, we have an imminent reversal from a downtrend to an uptrend. If the MACD line crosses the price signal from above, we are facing the imminent reversal of an uptrend into a downtrend.

This strategy can be combined with various candlestick patterns that offer further confirmation of the upcoming reversal, and other indicators as well. However, for short-term options like 60-second options, keeping settings simple should always be a priority.

Using various candlestick patterns, such as the pin-bar (also known as Pinocchio) is also a viable strategy to identify several upcoming trend changes. The pin-bar is a very peculiar candlestick, with a small body and a long wick. Depending on which side of the body of the candlestick the long wick forms, we have a bearish or bullish pin-bar pattern. In theory, when there is an uptrend going on and suddenly a bearish pin-bar forms, we are looking at an imminent price drop, which obviously should be traded via a PUT option. By analogy, bullish pin bars require CALLs.

With this strategy, time is of the essence. Missing a beat here and there will definitely defeat Pinocchio.

The Straddle Strategy It is a damage control oriented approach, the main goal of which is to help the trader overcome some highly volatile market conditions that can come out of the blue. Straddling is a bit like hedging, but there are considerable differences between the two. In light of the fact that hedging doesn’t work with binary options, that’s a great blessing. The Straddle approach is about placing two trades, one time apart, to counteract the effects of unexpected volatility. Additional indicators are also used to forecast volatility-induced bullish and bearish movements. In certain cases, the Straddle strategy can indeed lead to doubling of profits, but again, its main mission is to limit losses.

support and resistance Levels have been used for binary options trading since the very beginning. The concept of support and resistance draws its legitimacy directly from the actual trading movements made by the institutional and retail traders involved in trading a given asset. Support levels are essentially price levels from which the price bounces repeatedly when heading down. Resistance levels are similar ceilings, from which the price bounces when heading higher. This strategy seeks to take advantage of these bounces resulting from these support and resistance levels.

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