Best way to trade binary options
How to analyse binary options?
Trading binary options can be an extremely profitable business. There are many complicated explanations of what binary options are, but in fact they are the simplest tool for trading.
If you explain what binary options are in simple terms, it is a certain contract, in which a certain asset plays a major role. In practice this can be anything from a stock to a change in the weather. It is on the asset you need to make a prediction - will it go up or will it go down.
If the option is bought for 10 minutes on the growth of the asset, and in 10 minutes the asset will be higher - then you get the profit, because your growth condition is fulfilled. It doesn't matter how much the asset rises, as long as it is more expensive than at the time of purchase. The same applies to the inverse situation with a downgrade option.
In other words, speculative trading is performed with the help of a trade asset and if the dealer's forecast is reasonable, the dealer can earn money. Otherwise, he will lose his investment. Different types of asset analysis are used to make forecasts more accurate.
It is also called basic analysis, and this is not without reason. It evaluates the fundamental aspects that may affect the asset. If in the case of the shares, we will look at the issuer, its profits and market position. If the asset is a currency pair, the policies and the GDP of the country whose currencies are involved in the pair should be examined, etc.
Fundamental gives the opportunity to find the root cause in the price behavior, i.e. to connect a certain event with a certain movement, previously evaluating the extent and scope of its influence. The result of the analysis should answer the question of what is happening in a particular company, country - any area of influence - and how it will affect the future. The main difficulty with this kind of analysis is taking into account multiple factors, often conflicting with each other, and it will require some skill and experience.
The news (economic) calendar is the simplest and most accessible way to study fundamental factors.
On the brokerage platform, on the calendar page you can choose a period for displaying the upcoming events: today, tomorrow, this week or specify your own period. Then you can filter the list according to the importance of the news. It makes sense to pay attention to medium and high importance news, as they have the maximum impact on the market price.
Technical analysis is also called graphical analysis, the name reflects the fact that only price charts and price history are used for making price predictions.
Most professional traders successfully combine several types of this analysis in their trading strategies. But even using a single method as the basis of one's binary options trading strategy, it is possible to make a profit and such tactics will be quite simple. Let us review the main aspects of technical analysis:
- Support and Resistance Lines. They are levels which can visually keep the price within a certain range for a while. These levels are often called psychological levels, as many binary options traders see these levels as points to enter or exit the market.
- Trend lines are a very simple and at the same time effective technical analysis of options. With the help of trend lines, you can determine the direction of the current market movement.
- Graphical analysis has a set of graphical models, with the help of which it becomes possible to anticipate the market movement. There are different types of charts: line, bar and candlestick charts. As well as identifying graphical patterns.
- Binary options indicators graphically depict different systematic and mathematical calculations. Indicators are able to provide sufficiently clear signals to the trader to trade exactly on the chart in a graphical representation. Nowadays, there are quite a lot of indicators that can be found on the platform.
Selecting a timeframe
The timeframe is the specific timescale you use when analyzing. By changing the timeframe, you can analyze different lengths of time and look at shorter or longer trends. For example, if you select a timeframe of 3 minutes - you will get a chart which will show a candle (price movement) every 3 minutes.
Expiration is the time from opening to closing a trade.
Many people confuse the values of expirations and timeframes, and do not see any correlation between these two values. As a result, they make grave mistakes. For example, they trade on the hourly chart with an expiry timeframe of a few minutes.
For turbo options, do not use the time frame of hours and the minute frames for long-term options.
The optimum combination of expiry time and the chart used is the difference between the former and the latter by two timeframes below.
For example, with an hourly expiry timeframe, you would use the 15-minute chart. With a daily timeframe, it would be better to use the hourly chart.
As you can see, there are many aspects and nuances of option analysis. Start with choosing the asset and the time of expiry of the contract. Then you will know which analysis and time frame to use. Both types of analysis can be very useful. If you want to be successful, you must practice both types of analysis in tandem.
Their combination can be extremely beneficial. It is important to find out how binary options are evaluated before you enter the market. This will allow you to make an informed choice.
Finding the best way to trade binary options is the main task of any trader. But you have to understand that there is no such thing as a universal successful strategy. It all depends on the trader, the market mood and other nuances.
Having started the search, the trader comes across a problem - over saturation of the options market with all sorts of trading systems, methods and approaches, which are quite difficult to understand due to the lack of any systematization. So we are going to consider the main options trading directions, which you might be guided by.
This method of binary options trading is based on the principle of trading with even the smallest price movements: In this technique, trades are opened only for the shortest expiration time from 1 minute to 5 minutes, which on many trading platforms are called turbo options.
It is the high rate of profit taking, the increased level of profitability, and the likely accelerated rate of capital appreciation that makes scalping a lot of fans. However, this method of binary options has its significant disadvantage - an increased level of risk. The main danger of using scalping is the difficulty of identifying short-term price movements.
Trading by trend
This binary options trading strategy is a classic for all financial instruments. The trader earns by simply following the trend movement, while various charting tools can be used to increase the accuracy of the forecast, which can be used to identify market extremes, such as resistance and support levels.
Such a method of binary options as "Trade by trend" allows you to make a forecast with the maximum likelihood of profitable working and reduce trading risks to a minimum. So, this method is a favorite of many options traders, who use it as their main trading strategy on the futures market.
News trading is a binary options trading method, which is based on the natural market reaction at the moments when important macroeconomic news with statistics of companies or individual economic sectors are published.
Within news trading, the economic calendar plays an important role. The calendar reflects forthcoming events affecting the price of a particular industry or currency in general. You can follow events in different countries, analysts' opinions, news release times or historical data.
It is not only financial events that should be taken into account. Actions and declarations of politicians will also cause irreversible processes in the economy. For example, imposition of sanctions against a country considerably slows down the growth of its companies and no deals will be profitable there.
This mathematical method of binary options is always a cause of debate among traders. Traders who know how to apply it correctly tell us that it is a genius technique with unbelievable effectiveness that always gives a profitable final result. But there are also opponents of this technique, who for some reason do not know how to use it similarly effectively.
Martingale, by its principle of operation, implies doubling the amount of a future trading position after the loss of the previous one is over. For example, if a $1 trade ended in a loss, the next one should be for $2.
So we have looked at the main directions in which you can build your strategies. You will use charts and indicators to identify the best time to enter, read the news and use trading rules and techniques. At the beginning it might seem difficult, but you can always try out a binary options trading strategy on a demo account first, thus eliminating the risk.
Best way to trade binary options in the UAE
The best way to trade binary options in the UAE is to open a brokerage account and use an online platform. For those who are unfamiliar with the stock market, this may sound complicated, but in fact, even beginners use this method, and it is the most effective in today's world. Especially, you can work from the comfort of your home, or even from your smartphone.
The first step on your way to trading is to register with a reliable broker. From the platform, choose the register menu, then fill in some brief information about yourself and your email address. Wait for the email confirming the registration and click on the link. It is free and does not bind you to anything, and you will be a member of the platform and can take advantage of the brokerage software:
- First of all, it is a professional trading terminal with a clear interface, which you will use to make transactions.
- In addition, the broker will offer you an analytical section with charts and indicators, so you can select an asset and analyze it in one place.
- Also, please refer to the different video tutorials, which will answer all your questions about trading and investing.
- Download our handy mobile app, which has many useful features and allows you to trade wherever you wish.
- And, of course, if you're ever stuck, there's always the hotline to help.
Once you've completed the registration process, you'll be able to open a virtual account with play money. This is usually a lot of money and should be sufficient to learn how to trade. You'll gain priceless experience from your mistakes without losing any of your personal capital.
By using a demo account, you can familiarize yourself with how to read the charts and how to interpret the information given.
You will also get a good understanding of how the market works. This enables you to understand how to choose when to buy or sell an asset. You'll have the chance to develop and choose from the available binary options trading strategies that suit you. Try it, you'll do it!
Real trading account
Once you decide you're ready to play for real, with real money, open a real brokerage account. Once you have made a deposit, you will be able to trade and make a profit in this account. You can also withdraw your money from it. You can monitor all your trades and analyze your binary options trading strategy, and modify it if necessary.
When searching for the best way to trade binary options, you have to be careful not to become overconfident. People often believe that they can invest large sums of money without fear of losing it. This can lead to huge losses. It is best to set up an action plan and follow it clearly.