Both bullish and bearish digital options and binary options strategies are simple enough to be used by novice traders. The basis of these strategies is to make asset price movement predictions based on either of the two market conditions. Bullish conditions denote an active market in which the price of many assets are on the rise. Bearish is the opposite, with investors typically being either hesitant to invest or selling off assets prior to a possible decline in value.
Either strategy will require only that the digital options and binary options trader select either the put or call option, as well as an expiry time. Asset price trends can become much more apparent during extremely bullish or bearish periods, allowing many traders to easily profit from either of these basic strategies. That said, even when trends are strong, drops or increases in asset prices are not out of the question. Asset values will only move in the same direction for a period of time before a shift occurs.
Bull Market – Prices Consistently Continue To Increase
Bear Market – Prices Consistently Continue To Decline
Bullish and bearish strategies work best with both fundamental and technical analysis are included in the prediction making process. With these digital options and binary options strategies being strongly linked to market sentiment, some consideration of what is causing the general sentiment to be as it is should be given. Part of the trading learning process is to eventually be able to determine why assets are performing in a certain manner.
It may be possible to spot additional profit opportunities if market sentiment can be linked to specific asset classes or underlying assets. The bullish and bearish strategies should not only be applied to overall markets, but the specific assets within them as well. For example, bearish market conditions could be in place, while at the same time investors are taking the bullish approach to specific asset classes or underlying assets.
Technical analysis can be quite simple when using these strategies. Charts and graphs can clearly show which general direction the market or specific assets are taking. If an asset has continued to trend either up or down for a period of time, the trader must determine how much longer the trend may continue. This is where support and resistance determinations are needed. At a base level, the binary options trader will want to find out both the highest and lowest realized prices that the asset has reached.
In terms of fundamental analysis, market news may allow the trader to quickly determine what type of market conditions are in place at any given time. Often, shifts will come when major news and financial data are released. When using a bullish or bearish binary options strategy, traders will want to monitor market news closely. Many traders will time trades specifically around news releases as they are such strong indicators.
Bullish V’s Bearish Market
Note that either strategy can be applied to shifts, or pivot points in market conditions. At times, it may be possible to predict when a bullish market will turn bearish, or when a bearish market will turn bearish. It can take some time to be able to master the process of spotting pivot points, but those who do will certainly be able to increase their digital options and binary options profits.
The bullish or bearish strategies require no lengthy learning curve and can be used right away by new traders. Either market condition will create the potential to profit and can make doing so quite easy. Either strategy can be applied to any of the four major asset classes, as investor opinion is the main consideration. Those who have never applied a specific strategy to digital options and binary options trading are advised to start out with one of these two simple strategies.