The following are four practical and easy technical binary options strategies for novices. Each of these strategies are founded upon sound fundamentals and each has been widely used throughout the industry. Feel free to paper trade these before using them in the digital option platform, but since they are pretty basic, extensive testing is not a must.
Put/Call Support and Resistance Strategy
The most widely used binary options strategy for the novice traders is Support and Resistance. You will need to determine the price placement and then enter into Call trades when the price is in an area of support and Put trades when the price is in an area of resistance.
There are a number of methods to use in identifying these areas. One is to observe how the asset price behaves in past areas and then base your forecast of price movement when the asset price returns to these. This is at the root of technical analysis – forecasting upcoming price movement by examining past movement.
Fibonacci Bounces Strategy
Basic fibonacci levels can help you to pinpoint profit opportunities. Within certain levels you are likely to notice bounces of the asset price. However, many balanced patterns also develop within these levels. Bounces are excellent levels for support and resistance.
They can also be combined with areas of overbuying for Put options and areas of overselling for Call options. In order to draw fibonacci for this strategy, simply connect the two levels and watch for the asset price to hit.
Trend Bounces Strategy
This simple binary options strategy will help you to trade successfully along with the trend. Even better, you won’t need to identify the trend before it begins. Instead, you’ll wait for the trend to establish itself and then look for prime entry points using EMAs.
When the current trend is strong, you simply wait for the asset price to come in contact with the EMAs. Should the asset price move downward during an uptrend, the EMAs can indicate areas in which the price is going to stop moving down and resume its upward trend and vice versa.
Heiken Ashi EMA Crossover
With this binary options strategy you’ll hold out for for EMAs crossovers and then enter your trades during the beginning stage of a new price trend. To do this you’ll need two EMAs – 13 and 26 period (5 and 15 minute time-frames). Use the Heiken Ashi indicator within your MT4 your chart to reduce excess market noise and avoid false signals.
You’ll want to select 15 to 30 minute expiry times to protect against some side-to-side movement in the first first minutes of price movement. Next, wait for crossovers. When one occurs and the Heiken Ashi bar is red, trade a Put option. A white bar will be for a Call option. With the first crossover select the appropriate position and then trade the opposite position when the second crossover occurs.