Currency Options Trading

Trading strategy for Currency Options (Binary Options)

Trading binary options for the most part is not much different from traditional trading currencies in the forex market. From an operational point of view, everything is simple, you either sell (put), or buy (call) an option on a particular asset, such as the EUR / USD currency pair, and the result is determined by the expiration time of that option. In the case of binary options no matter how far and how many points are the price of the selected asset, it is important only to find - above or below a certain level. The common trading principles make trading strategies for binary options similar to those in the forex market.

So how to trade binary options, is important for the future position of the price, a very popular trend indicator and oscillator. Let's look at binary trading strategies of choice to use them.

The "Two Stochastic" strategy makes it very possible to determine the start of the upward or downward movement of the price. The indicator value is set as follows - for the first 21, 9, 9, 9 for the second - 3, 3. As you see each other Stochastic Slow is fast. First of all, we notice slow stochastic signals - it shows us the general direction of the market, so we will open only in the direction of slow stochastic motion. Stochastic gives a quick signal directly to the input of the deal, but these signals will be filtered. If Slow Stochastic shows a downtrend, traders should consider selling only signals, and vice versa, with slow stochastic growth rates being taken into account only for purchases. The figure shows in detail the process of selecting a signal.

Trading strategies for binary options also use trend indicators, such as Moving Average. This indicator allows you to determine the direction of the trend, traders can only take the option with the general direction of movement. It should be noted that most profits with minimal risk provide medium-term trading options. Must be installed on a schedule with a period of 90 MA. Next, estimate the position of the price relative to the MA indicator, the price is above the MA - call option under - put option. With a large deviation from the MA line it is better to refrain from transactions, as there is a strong possibility at the start of relationship recovery. The best time to buy or sell stock options is price intersection and moving average.

As you can see, the trading strategy for binary options is based on technical factors. Technical analysis is the easiest and most effective way to predict future price movements. Therefore, the use of, for example, resistance and support levels also apply to binary trading options. Traders also use Fibonacci levels, forms, and other technical analysis indicators that make it possible to predict price movements.

But do not discount fundamental analysis, there is a strategy for binary options based on the output of economic data. The essence of it is very simple, all you need is an economic calendar. Traders await the arrival of some news and track currency pairs, which will affect the output of the news. When it becomes a known economic indicator, for example, the unemployment rate rises in the United States, traders buy put options in US dollars or call options in European currencies. Of course, the US dollar will remain under pressure because of negative news. Merchants should choose important news that will have long-term effects to increase the chances of success, usually for economic news this calendar is marked in red, or an exclamation point.

The trading strategy for binary options has much in common with foreign exchange market trading, so you can use the same method. The strategy should be chosen depending on your trading style if you trade long term, then pay attention to fundamental data for medium and short term trading strategy will be the best choice with the use of technical tools.