Binary Options Signals: Strategies and Trading Tips
Binary Options Signals: Strategies and Trading TipsSeptember 19, 2012
What are binary options signals? Basically they can be viewed as alerts or flagging mechanisms that allow you to execute trades in an optimal fashion. There are many types of entry and exit signals, and it would be highly advantageous to have some type of previous trading experience or a minimal amount of knowledge in charting and understanding of basic terminologies, however to get started this is not a must.
You do however need to be extremely focused on what you want to achieve as well as make a commitment to being a successful binary options trader – and you gotta stick to it! Now, there are many vendors out there offering their software and services to get a piece of your hard-earned money. This is just a partial list:
|Accept US Traders
|Forex Pairs / Commodities
|Nice to have, not a must
|Forex Pairs / Indices
|Lacking in tools
|Not enough assets
|Too costly, Not enough assets
The sad truth is that you don’t really need these services to make money trading binary options online. However, if you want to truly succeed and profit consistently you need to have an action plan that adheres to these principles:
1. Risk Management – Never invest more than you can afford to lose.
2. Strategy – what kind of trader are you? Technical, Scalper, Swinger, or Momentum
trader? Read up on these trading styles and see which best describes you.
3. Trading the News: You must be constantly focused on the financial news and have a
strong intuitive grasp of markets and supply and demand forces.
4. Have an Exit Strategy: You have to know when to fold. As my colleagues always say,
you never exit on time, its always before or after when its too late so don’t be too greedy!
5. Don’t be Afraid to Take a Risk When the Signal is Evident: If you don’t take
risks you will never make money trading binaries.
6. Trading is Not for Everyone: Some people lose their savings and pension funds due
to irresponsible trading practices. If you are an emotional trader better quit while your
7. Find the Binary Options Broker that is Right for You: Compare and read the
reviews; We have a large selection of recommended and trusted brokers.
8. Free Demo Account – Its always best to practice trading in demo mode. Simulating
trades is a great way to get a feel for the platform and the software, as well as the staff
Some Basic Entry Signals Screenshots and Explanations
Hammers and Hanging Man:
The Hammer is a figure represented by one candle. You can very easily recognize it when you see a small body with a shadow at least two times bigger than the actual body.
You need to be sharp and check the bottom of a downward trend. When this happens you know the market is ready to become bullish on the asset.
Remember, a white candle means there is more of a bullish trading environment as opposed to the black body. Follow up the following day and see if the markets took a positive turn, this is the only full-proof way to confirm this signal.
Cup and Handle Formation
The Cup with Handle formation is a charting tool designed for traders wanting to identify entry and exit signals. If you look at the “base low” as displayed on the image, you will see a good entry signal for playing the downside. I don’t recommend playing the upside unless you plan on selling short or buying a contract and speculating the outcome will be “below” the resistance line.
The Bear Trap
A bear trap is deceptive or false signal indicating a rising reversal pattern of an index or certain stock when in reality this is not happening. In this scenario traders will place short trades on the asset, since they expect a decline in value. The opposite happens instead and the investment does not fluctuate at all, and at may slightly recover.
A Bull Trap is a false or deceptive signal indicating a declining reversal trend in an index or stock. The underlying asset seems to be progressing upwards but in reality the downward pattern will continue.
Harami & Doji Cross
Harami, means pregnant in Japanese. It stands for a trend indicated by a big candlestick followed by a Doji cross. The cross covers the candlestick’s body from top to bottom as depicted in the image. This patterns is an indication that the previous trend is going to reverse.
To summarize, binary options entry and exit signals are invaluable tools you must utilize if you want to profit and make money trading binary options. However, without a proper trading strategy and a partnership with the right broker, you will not be able to succeed. Furthermore, you must constantly review and analyze the financial news and charts in order to make smarter investments. The more sources of news you have access to the better your decision-making process will be.