In trading of financial instruments such as the binary option, You as a trader must study the market to formulate your strategy. You make an informed decision. If you believes the market is rising, you would purchase a call. If you believes the market is falling, you would buy a put.
In a call, the traders gain profit if at the expiry time of the trade, the bet price is above the strike price. On the other hand, traders gain profit in a put when the bet price is under the strike price. All the details such as the expiry, the strike price, etc. are determined prior to the start of the trade.
Now let’s Examine Strategies for the Intermediate level Traders
The following are 3 strategies in Binary options for Intermediate Traders:
First, is the reversal strategy. This strategy is normally used when an asset experiences a sudden swing to a direction other than its usual course. However the case, traders believe that abrupt changes will not last long and the asset is bound to return to its natural course. For traders to make money on this, they will purchase a call or a put option in accordance with the initial movement. They invest on the potential rebound movement. There may be short term or long term reversal strategy, but the former is more usual. For this to work using Call option, the condition should be the presence of a downward trend for 2 hours on a 1-minute chart. Once this situation is established, the trader should place a call option trade for up to 10-min expiry on the lowest price on the present trend. For put trades, the set-up is comparable but on the reverse. An upward trend must be present for 2 hours on a 1-minute chart. If established, traders are to buy a Put option trade up to 10- minute expiry placed on the highest price of the trend. There are no indicators in this strategy but the price analysis. External factors are often abandoned.
Another is the Market Pull Strategy, often dubbed as the crowd favorite. This strategy is used only when the trader has a mastery of the effects of the fluctuation in the price of a particular asset to another different asset, also known as the Knock on Effect. For instance in Forex currency pairs trading, there is a usual inverse relation between USD/CHF currency and EUR/USD currency pair. Putting a call on the other, while a put is in another may be a good strategy.
Lastly, we have the double trading strategy. This one is adopted largely by traders who have a good grasp of the current state of the markets. Those who are always on top of things go around. This is done when they have previously purchased an asset and realize that the movement is in their favor. For instance, their shares in Nikkei are making a considerable profit. To benefit further in this situation, they will enter into a binary option trading, knowing that the recent movements are indicative of a possible increase or decrease of asset value.
Although you are an intermediate trader and not a beginner it is best to always remember about binary options that regardless of how simple the mechanics are, it is more than a simple Yes or No answer. It involves a tedious skill to master, good analysis of the market, and a bold character. And we are here to provide you with the best and secured platform for your successes trades and earning money!