The binary trading market is a pool full of promises to turn every beginner into a millionaire and improve their trading. Most beginners, however, fail to realize gains consistently and are overwhelmed by the complexities of the market. Adding to the damage is the deluge of strategies and indicators that are often sold as infallible solutions. This can keep one confused and annoyed.
Pocket Option is the trading platform for harmonizing your binary trade. It’s very user-friendly and provides traders with all the necessary tools. Real-time charts, a rich list of indicators, and settings for trade to fine-tune your strategy—Pocket Option is exactly what both experienced traders looking to refine their strategies and new traders would want to help them get started.
Proven Binary Trading Strategy
As said in any binary trading signals review, a strong strategy is essential in overcoming the complexities involved in binary trading. The present piece of writing highlights a step-by-step approach to a binary trading strategy that will be helpful for beginners to earn huge profits while managing the risks effectively.
READ: The Best Binary Trading Strategy in 2024
What is Binary Options Trading?
Trading binary options is based on speculating on the price movement of an underlying asset within an assigned time frame. The trader deposits an amount; a raise or decrease in the price is decided upon. If his prediction is right, he gets a fixed return; if wrong, he loses his money. It is that easy, and this is what leads to the appeal for many traders in binary options.
One can define binary trading or Binary Options trading as a financial investment tool whereby traders make speculations over price movements of assets. Here, “binary” is used because there exist two possibilities of output: either the trader collects predefined profit or loses everything. This simplification of trading can become very attractive to both beginners and professionals in the field of investing.
One of the major characteristics of binary trading lies in its fixed risk/reward structure. Both the amount which a trader can win or lose is known beforehand, and there is no complexity involved in the decision-making process.
For example, if a trader invests $100 into a binary option, then he might get back his investment with an additional $70 if he happens to be right but could easily lose the entire amount if he is wrong in his prophecy
How To Setup The Platform
Prior to actual trading, the Pocket Option platform has to be correctly set:
- Candlestick Time Frame: Set the candlestick time frame for 30 seconds.
- Trade Duration: Set the trade duration to 1 minute.
- Currency Pairs: Choose currency pairs in which the trade has maximum profit potential. These are mostly currency combos like the Australian Dollar with the Canadian Dollar, the Australian Dollar with the Swiss Franc, the Australian Dollar with the New Zealand Dollar, and the Australian Dollar with the US Dollar.
Moreover, to increase the chances of success, one has to use reliable indicators. Among the best indicators for this strategy are the Zigzag indicator paired with the Stochastic Oscillator.
- Zigzag Indicator: This shows major reversals in price direction. Mark each change in direction of the zigzag line because these points can be so critical in deciding a possible reversal of the trend, even way back.
- Stochastic Oscillator: This indicates the approximate rate of the current value of an asset towards either its high end or low end. In cases where the value is positioned above 70, the security is overbought, thus portends a falling level of prices. In contrast, when below 30, it means that the security is oversold and therefore means that the price will increase.
How To Implement Strategy
With the platform arranged and indicators all set, it is time to start trading:
- Step 1: Recognize the Trend: Identify the current market trend conditions as identified by the Zigzag indicator. Look for clear upward or downward movements.
- Step 2: Evaluate with Stochastic Oscillator: Confirm the trend using the Stochastic Oscillator. Ensure that the oscillator’s signals align with the trend identified by the Zigzag indicator.
- Step 3: Execute Trades: Based on the analysis, execute trades in the direction of the trend:
- Uptrend: Buy call options if the trend is going up but the Stochastic Oscillator is below 70.
- Downtrend: Purchase put options when the trend is downward and the Stochastic Oscillator is above 30.
Sample Trades
- Australian Dollar/US Dollar: Buy a call option when the Zigzag reflects high movement and the Stochastic Oscillator is below 70.
- Australian Dollar and Swiss Franc: When the Zigzag is in a downward trend and the Stochastic Oscillator is set above 30, acquire a purchase option.
Long-term success in binary options trading will rely on effective risk management. Some tips for effective risk management in binary options trading:
- Spread the Investments: Do not invest all your capital in one trade. Instead, diversify your investment across various assets and volume of trades.
- Set Stop-Loss and Take-Profit Levels: These are orders put in place to get you out of trades, protecting capital and locking profits at a point previously set.
- Limit Leverage: Apply leverage references with care so as not to magnify the potential loss.
Continual Learning and Practice
Binary options trading is a learning curve that facilitates continuous practice. Below find some steps that will help improve one’s trading skills:
- Paper Trading: Practice your strategy with the help of a demo account without risking real money.
- Review and Make Adjustments: Always review your trading performance and make necessary adjustments to improve your strategy.
- Stay Updated: Keep yourself up to date with market news and trends to continue modifying your strategy in line with changing market scenarios.
Conclusion
The trading of binary options is related to high profitability, but well-thought-out and efficient risk control is indispensable for success. Using the platform of Pocket Option, combined with the well-practiced strategy described in this article, the trader will have a much better chance of success.
Remember, continuous adaptation of the binary options trading learning process stands as the main pillar. Get involved with trading communities, keep up-to-date with the latest events in the markets, and always update the strategy you are using. Incorporate dedication and the right approach for a change in trading experience as you strive to keep up with your financial demands.
