Not all digital options strategies are solid and not all strategies are appropriate for new traders. Certain strategies, although quite effective in design, will only provide benefits when used by traders who already have some experience with both trading and analysis. The five strategies discussed in this article are easy to use and will provide you with a great foundation for future strategy usage.
MACD Entry Strategy
The Moving Average Convergence Divergence indicator is among the most commonly tools used by traders. This strategy is short-term by design and is based on the MACD signal. The goal is to use a pair of MA’s (moving averages), together with the MACD histogram to reveal price trend signals within price charts. Although the strategy was designed to be used along with five-minute charts, it can be used with one-hour, daily, or weekly charts as well.
Price Trend Strategy
This strategy is the most well-known by digital options traders. The goal here is to simply identify asset price trends and then use them to enter into trade positions that match the current direction of movement. This strategy is fantastic for novices, as it covers some of the most basic and profitable elements of trading. Furthermore, the strategy can act as a foundation for various other strategies.
Pin Bar Strategy
This strategy brings together many key elements of digital options trading. The strategy is structured around a well-known technical indicator known as a pin bar. In Japanese candlesticks, this is called a shooting star. The signal delivered is excellent at showing you the upcoming price movement. The signal does not vary much in how it is displayed within the analysis chart, and because of this the pin bar is suitable for new traders who are working to master the analysis process.
Hedging is an important part of many different types of trading. Hedging helps digital options traders to safeguard their account funds by entering into opposing position trades, possibly doubling profits, but frequently offsetting loss. This strategy works well to provide modest profits, while making losses easier to absorb. This strategy can be used along with smaller investment amounts. Minimal investment amounts are always an excellent idea for beginner level traders.
Price Action Strategy
This strategy involves spotting upcoming price reversals. The strategy uses reversal patterns that develop near support or resistance lines within a technical price chart to tell of the upcoming price movement. This is a great strategy for novices because it is straightforward and can be applied using various tools and techniques suitable for novices. As soon as you grasp the basic principles of this strategy, consider using it along with additional binary options tools in your evaluations in order to arrive at highly accurate forecasts.