10 BINARY OPTIONS STRATEGIES

10 BINARY OPTIONS STRATEGIES

www.BinaryOptionsBonusGuide.com

Contents Introduction .................................................................................................................................................. 2

What are Binary Options? ......................................................................................................................... 2

Why trade Binary Options? ....................................................................................................................... 2

Advantages of trading Binary Options: ..................................................................................................... 2

Major Economic News Strategy .................................................................................................................... 3

Aggressive Trading Style Strategy ................................................................................................................. 6

Straddle Strategies ........................................................................................................................................ 8

Corrective Strategies ................................................................................................................................... 10

Retraction Strategies................................................................................................................................... 13

Pair Option Strategies ................................................................................................................................. 15

Hanging Man and Shooting Stars Strategies ............................................................................................... 17

Binary Options Breakout Strategy .............................................................................................................. 20

Binary Option Put Trade Using Breakout Strategy ................................................................................. 21

Support / Resistance Strategy ..................................................................................................................... 22

Binary Option Trades Using Support/Resistance Strategy ..................................................................... 23

Follow-the-Trend Strategy .......................................................................................................................... 24

Binary Option PUT Trades Using Follow-the-trend Strategy .................................................................. 25

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Introduction Welcome to the exciting world of Binary Options where you can earn up to 81% on your money as

quickly as 60 seconds.

We have reviewed many trading strategies and have chosen those that best suite binary options trading.

We have included strategies that range from beginner to advanced. We will provide you with ten

proven strategies that you can use to be successful in Binary Options trading.

Understanding a tested trading strategy is not the only component needed to become a successful

trader. You must also maintain proper discipline and composure as you trade. The final ingredient to

begin earning 75% a minute is choosing a broker to implement your strategy. For your convenience we

have paired each strategy with a trusted broker where you can start earning your 81% today!

What are Binary Options?

Binary options are a simple way to participate in the movement of financial assets. They are Binary in

nature in that there are only two possible outcomes. Either you win the predetermined profit % or you

lose your investment.

Why trade Binary Options? Binary Options affords traders and investors alike the opportunity to gain huge returns on their

investments up to 81% in short time periods without the need for a large capital investments.

Advantages of trading Binary Options:

High Returns

Short Expiries

Small Investments

No Commissions or Fees

24/7 Trading

Access to multiple markets




Major Economic News Strategy The publication of key economic national data is highly anticipated by investors as

they can produce substantial price surges. Excellent examples of these types of

events that are regarded by traders as of the utmost importance are: National

Interest Rate Changes, US Non-Farm Payroll, US Trade Balance and US

Unemployment Claims, etc.

Trader Level: Intermediate

Risk Level: Medium

The dates and times of all the important releases are published well in advance and

are accessible to everyone. Your Forex broker will normally provide you with this

information in the form of an economic calendar, as shown in the next diagram.

Trading news releases can be a very lucrative activity if performed correctly.

Basically, there are a number of ways of performing this task. In each case, you




need to focus on those major news releases that are capable of generating large

increases in volatility and, as such, provide the best opportunities of good profits.

You can improve your chances of success if you learn how to detect the

consolidation phase of the currency pair just before a news release. Price tends to

become more stable at these times because the market is anticipating the release.

This means that price is trading within a tight range that is capped between a

ceiling or upper resistance and a floor or support, as displayed on the following

diagram. Traders are hoping that the event will increase volatility so that it is

capable of creating a breakout with sufficient momentum to cause a price surge.




I. Identify News Release: Use the economic calendar to identify the times of a major news release.

II. Identify Trading Range: Select a currency pair that is range-trading prior to

the news release.

III. Identify Support/Resistance Levels: Find the resistance and support levels

by simply noting the highest points for resistances and the lowest values for supports, as shown on the chart above.

IV. Initiating Trade: Execute a 60 second CALL binary option if price surges 10

pips above the ceiling of the range. Alternatively, activate a 60 second PUT binary option if price plunges 10 pips below the floor. Both options need to be

based on the same chosen currency pair.

This strategy provides good opportunities for exploiting major economic news

releases for quick profit. As such events are notorious for whipsaw actions, your 60

second trades provide the optimum opportunity to secure profits before price has

time to retract.

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Aggressive Trading Style Strategy One-touch binary options are ideally suited to those traders possessing more

aggressive temperaments because they provide very high rewards, i.e. up to 500%

albeit at high levels of risk. These are best used when assets are trading distinctive

trends or when levels of volatility are high. Consequently, you should steer well

clear of one-touch binary options until you have acquired sufficient skill and

knowledge to competently handle their increased risk exposure.

Trader Level: Advanced

Risk Level: High

Essentially, you will finish in-the-money if the price of the underlying asset of your

one-touch binary option strikes a preselected value at least once before expiration.

If price fails to achieve this goal, then you will close out-of-the-money and will lose

your deposit. If the target price is higher than the opening value, then you need to

instigate a CALL one-touch option. In contrast, if the target price is beneath the

opening value, then you should open a PUT one-touch option.

For example, consider that the Bank of England has just announced that it has

lowered its interest rates in order to bolster the faltering UK economy. After

investigating the reasons for this decision, you conclude that the GBPUSD will drop

amid increasing levels of volatility. You select a PUT one-touch binary option based

on the GBP/USD as shown in the next diagram.

‘




I. Identifying Volatility: Detect an asset that is displaying high levels of volatility on its charting charts.

II. Record Key Parameters: Note the target price, the payout ratio; the

rebate ratio and the listed expiry time of the applicable asset.

III. Initiate Trade: Enter a deposit and execute a CALL one-touch option if you

have concluded that your chosen asset will rise in value. Alternatively, activate a PUT one-touch binary option if you have deduced that the price of

your price will plunge in value.

IV. Monitor the Trade: You can track your binary option by using a graph, such

as the one shown on the right of the below diagram. Usually, if the color of

the graph is green then this indicates that the trade is currently in-the-

money.

If red, then your option is presently out-of-the-money. The red vertical line

represents the time your option will expire.

You can buy one-touch binary options throughout every trading day and they will

expire at various times chosen by your broker. You can even initiate them during

the weekend. The following Friday will then be used as the expiry time.

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Straddle Strategies Straddle strategies are renowned for being straightforward and effective. This is

because the price of assets tends to move in a series of waves with each one

possessing a crest or top and a trough or bottom. The tops and bottoms of these

wave formations are considered to be major reversal patterns that signify a

fundamental change in direction of the current trend.

Trader Level: Immediate

Risk Level: Medium

Straddle strategies are most effective when volatility is low and price is trading a

constricted range. Essentially, you will activate binary options that straddle the tops

and bottoms of this range.

New binary options should then be opened in the opposite direction as price rebounds

against the resistance (top) and support (bottom) levels. For example, open a new

PUT option if price ricochets against a top. Similarly, execute a new CALL option if

price rebounds against a bottom. The following chart shows these features.

The above chart shows a series of waves consisting of Top1, Bottom 1, Top 2,

Bottom 2, Top 3 and Bottom 3. To exploit this pattern, you need to open PUT




option 1 at Top 1. As price rebounds from Bottom 1, a CALL option should be

opened. Similarly, PUT option 2 needs to be opened as price rebounds from Top 2.

Consequently, one of the prime objectives of the straddle strategy is to detect tops

and bottoms as accurately as possible. Many successful traders base their

strategies on the famous trading maxim which states ‘buy low and sell high’.

The basic steps to open a straddle strategy are as follows:

I. Detect a Range-trading Asset: Identify assets that are ranging trading by

locating those whose price has been advancing in a horizontal direction for

some extended time. The range of movement should also be restricted by a

ceiling or top and a floor or bottom. Ideally, price should have ricocheted

against these levels numerous times.

II. Resistance and Supports: Wait till price bounces against either a support

or resistance level. Ensure that the level holds by confirming that the next

candlestick closes above a support (CALL) or beneath a resistance (PUT)

option. Examples are displayed in the above diagram.

Opening Trades: If these conditions are confirmed, execute CALL options

whenever price rebounds against a support and activate PUT options after it

ricochets against a resistance.

To develop successful straddle strategies, many traders study the weekly and

monthly charts of assets in order to identify tops and bottoms. In particular, they

are especially interested in those levels that price has bounced against a number of

times. Once achieved, they then join consecutive peaks to form resistances and

consecutive troughs to form supports. These lines can then present good trading

opportunities whenever you can detect price rebounding against them.

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Corrective Strategies This strategy should be applied anytime the price of an asset undergoes an

unexpected surge in value either upwards or downwards. Quite often you can

detect when such an event has occurred because a distinctive gap will appear on

the trading chart of the applicable asset, as shown on the chart below.

Trader Level: Immediate

Risk Level: Medium

Under such circumstances, price will then normally perform a corrective action by

reverting back towards its pre-gap level, as displayed on the chart above. This

occurs often because over-eager investors may have generated a price spike that

needs correction. Experts have devised numerous correction strategies to enable

them benefit from such trading conditions.




For example, the basic steps to open a corrective strategy are as follows:

I. Identifying Gap: Detect a distinctive price spike or gap of an asset on its

charting chart.

II. Initiate Trade: Execute a new binary option in the opposite direction of the

gap once price has moved back inside it. For example, in the above diagram,

a PUT option should have been activated.

III. Closing the Trade: Exit the trade at expiration unless the gap was been

completely filled beforehand. In that case, see if you can prematurely close

your option at profit especially if your expiry time will not elapse for some

time.

Tracking economic developments over the weekend can be a lucrative study

especially if you are able to identify any serious impacts on the proceedings of the

preceding week. If you can accomplish this objective, attempt to ascertain the

primary stimuli that have created these differences. If the financial markets then

open the new week displaying the expected gap, you should consider executing a

new trade based on a correction strategy.

Once price commences the process of gap-filling, this procedure seldom stops

because there are no immediate supports or resistances to prevent it. This is why

detecting price surges or gaps can be a profitable activity.

The next correction strategy has been devised to forecast price retractions. A new

trade must only be executed in the current trend’s direction. Price must then surge

either below a support or above a resistance before retracing to its original pre-gap

level. The gap would then be filled. The next chart demonstrates such a corrective

strategy.




Next wait until you are able to clearly identify a candlestick confirming that price is

moving back in the original direction of the gap. This action provides confidence that

the new support, former resistance, has not been broken.

This corrective strategy provides quality trading opportunities exhibiting optimum

profit potential at minimum risks. Note specially that although significant gaps are

not created often, correction strategies are associated with a very high success rate

in the order of 85%.

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Retraction Strategies A very popular trading strategy is termed ‘Trend Retractions’ which possesses one

major benefit in that it allows you to trade in the same direction as the current

trend. The main problem that you will encounter when using it is that you will need

to determine if price is undergoing a retraction or a more serious reversal. This

difference is very important because you will need to know if price is performing a

permanent decline or just a temporary dip.


Risk Level: Medium

So what exactly are retractions? They are brief price dips that are created within a

larger price channel or trend. Their most important feature is that they do not last

for long before price resumes its original direction. Retractions are usually produced

by small investors withdrawing profits and as such do not produce large increases

in trading volume.

Retractions generate only minor chart formations and the ones they do are mainly

limited to a few minor candle patterns. Their lifespan is usually very brief and so do

not last normally for longer than a week or two. Retractions are born normally after

large price movements have been generated.

Essentially, if you detect price retracting within a bullish channel, as shown on the

chart below, then you should execute a CALL binary option after it has bounced

against the lower trend line and proceeded back upwards. Similarly, you should

instigate a PUT option if you detect price retracting upwards within a bearish channel

and bounces against the upper trend line.




I. Identify Trending Channel: Locate a currency pair progressing within either a well-defined bullish or bearish channel.

II. Identify Trendlines: Create an upper trendline by drawing a line connecting

the recent highs. Similarly, draw a lower trendline by connecting the recent lows.

III. Confirm Price Test: When price retracts and hits either an upper or lower trendline, confirm they are not breached by ensuring that the current candlestick closes below the upper trendline or above the lower one.

IV. Initiating Trade: Execute 60 second PUT options if price bounds against the upper trendline and open 60 Second CALL options if price ricochets

against the lower trendline, as displayed on the chart above.

If you are unable to identify a clear-cut trending channel on the chart of a particular

asset, then leave it and study others. To be successful at this type of trading, it is

essential that you can detect clearly defined trending channels without any

complications.

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Pair Option Strategies Pair options allow you to trade a well-defined market neutral strategy which can

produce profits under all market conditions, i.e. bullish or bearish trends, etc. This

is because they enable you to speculate on the relative performance or two highly

correlated firms operating in the same market sector, e.g. BP/Shell, over a

specified period of time.


Risk Level: Low

Pair options have been constructed so that correlation can be used as a parameter

to assess the ongoing relative performance of two assets as a percentage. This

feature facilitates the construction of basic pair options strategies based on

statistical analysis using established technical indicators, such as the Bollinger

Bands, mean derivation and Fibonacci numbers, etc.

Consequently, you have better chances detecting new quality trading opportunities

using pair options because you can exploit these impressive statistical features.

Basically, you must learn how to use correlation to identify divergence which will

occur when the first asset of a pair starts to either out-perform or onder-perform

the second one. The former case offers excellent opportunities to activate CALL pair

options while you should consider opening PUT options under the latter conditions.

Your efforts to master these skills will be worthwhile especially because one of the

most important benefits of pair options is that they involve low levels of risk.

I. Identify Asset Pairs: Compile a portfolio of asset pairs that are highly

correlated e.g. Amazon/Apple, BT/Vodafone, Exxon/Shell, etc. Then devise

methods using fundamental or technical analysis to allow you to monitor the

key parameters of the two securities comprising those pairs of interest, i.e.

performance history, relative growth and volume, etc. Premier pair options

broker supply a wide selection of tools to allow you to perform this task

competently

II. Rating: Rate the assets pairs in your portfolio using statistical models such

as Fibonacci numbers or the mean-diversion concept. For instance,

outperforming assets will have low ratings while under-performing ones will

register high values. Your basic pair options strategy will then advise you to

open CALL options when assets post high scores and activate PUT ones when

ratings are very low.




Initiate Trade: Open 60 Second PUT Pair Options when the first asset of a pair

begins to underperform the second other. Similarly, execute a 60 second CALL Pair

Option when first asset of a pair commences to outperform the other.

By devising basic pair options strategies constructed on the concepts outlined

above, you will then definitely increase your chances of trading successfully

especially by keeping your costs low and utilizing a premier trading platform.

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Hanging Man and Shooting Stars Strategies These strategies are primarily utilized to identify when the price of an asset is about

to undergo a major reversal in direction. The hanging man and shooting star

candlestick structures are also called pinbars.

Trader Level: Novice

Risk Level: Low

1. Hanging Man

This structure has a small body and is created towards the end of a descending

bear run. Traders deem that the color of the hammer is insignificant and are keener

to confirm that the length of the lower tail is at least twice that of the body and that

there exists little or no wick, as displayed by the next diagram. This structure is

deemed to be a strong bullish indication that strong selling efforts were vigorously

rejected during the lifetime of this candlestick.

2. Shooting Star

This structure is created when the opening, low and closing prices of a candlestick

are formed close together. The shooting star’s other primary attribute is that its

long wick is normally double the length of the body, as shown by the second

candlestick in the next diagram. The shooting star is a strong bearish sign

indicating that the latest bullish activities have been vigorously rejected by

investors.




The following chart demonstrates how to use hammer and shooting star strategies.

When a shooting star is detected then it normally denotes the beginning of a new

bullish movement. as shown towards the left of the diagram. Open a CALL binary

option at the start of the next candlestick.

Similarly, the hammer displayed towards the right is indicative of new bearish

activity. Open a PUT binary option at the start of the next candlestick.




I. Identify Pinbar: Detect an asset that is displaying either a shooting star or hammer on its 1 minute trading chart.

II. Confirm Price Test: Confirm that a new bullish trend is forming by verifying

that the next candlestick opens higher than the close of the shooting star.

a. Similarly, confirm that a new bearish trend is forming by validating

that the next candlestick opens lower than the close of the hammer

III. Initiate Trade: Activate a CALL binary option after the ensuring candlestick climbs 10 trading points higher than the close of the shooting star

candlestick.

a. Execute a PUT binary option after the ensuring candlestick falls 10 trading points lower than the close of the hammer candlestick.

You can readily base strategies on the hammer and shooting star as they are

relatively easy to detect.

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Binary Options Breakout Strategy If a currency pair has been trading for some time within a tight range, then when

it does breakout it usually progresses in its new direction for some time.

Trader Level: Beginner

Risk Level: Low

In the Breakout Strategy you are looking for a currency pair that has been trading

within a tight trading range for an extensive time period. A trading range is

clearly delineated by a ceiling and a floor, the ceiling being the highest price that

the asset trades within the trading range and the floor being the lowest price. When

the price bounces against its ceiling or floor a number of times at some point it

finally breaks free.

TRADING RANGE

A clean breakout should consequently be viewed as a strong signal to initiate a 60

Second Binary Options trade. If the breakout occurs below the floor initiate a Put

option; if the breakout occurs above the ceiling initiate a Call option.

BREAKOUT

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Binary Option Put Trade Using Breakout Strategy

The above chart illustrates an AUD/USD currency pair which was trading in a range

defined by a ceiling of 1.03856 and a floor of 1.03828.

TO USE THE BREAKOUT STRATEGY

I. Identify the Breakout Point: AUD/USD trades below floor level of 1.03828

for a full one minute as indicated by the fully formed candlestick labeled

“bearish breakout” in the chart above.

II. Initiate Trade: Open an AUD/USD ‘PUT’ 60 Second Binary Option.

As this type of trading is dynamic, do not risk more than 2% of your equity per

position. If your balance is $10,000, your wager will then be $200. Your opening price

is 1.0380 and your payout ratio is 75%. After the 60 second expiry time elapses, the

AUDUSD stands at 1.0378 and you are in-the-money and collect a $150 profit after

just one minute.

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Support / Resistance Strategy In the 60 Second Binary Options Breakout Strategy you initiate trades upon a

breakout from the range. In the Support/Resistance strategy you will learn to

execute trades within the range taking advantage of price bounces off of

support/floor and resistance/ceiling levels.


Risk Level: Medium

The price of an asset tends to move in a series of waves possessing tops and

bottoms which are considered to be major reversal patterns and can be easily

identified by major resistance and support levels on a chart. A favorite 60 seconds

binary option trading strategy is to detect times when the price clearly rebounds

against these resistance and support levels. New binary options should then

be opened in the opposite direction to that in which the price was progressing

before the rebound.

For example, the following 60 seconds trading chart illustrates examples of opening

both PUT and CALL binary options. Basically, when price rebounds against

resistance, then you should initiate a PUT option while if it springs upwards after

hitting support, then activate a CALL option.



Resistance

Support




Binary Option Trades Using Support/Resistance Strategy

I. Identify Trading Range: Detect a currency pair that has been range-

trading for an extensive time.

II. Identify Support/Resistance Levels: Find the resistance and support

levels by simply noting the highest points for resistances and the lowest

values for supports, as shown on the chart above.

III. Confirm Price Test: When stock price reaches the support or resistance

level confirm by making sure current candlestick closes below resistance

or above support.

IV. Initiate Trade: Open 60 Second PUT options if price bounds against

resistance and open 60 Second CALL options if price bounds against support

as displayed on the chart above.

In the above example you could make four 60 second trades in a period of less

than one hour. If you successfully followed the Support/Resistance Strategy you

would have profited on all four trades. If you had invested $100 on each trade

you would have earned up to $300 in less than an hour.

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Resistance

Support







Follow-the-Trend Strategy In the Follow-the-Trend Strategy you initiate trades upon movements off of the

trend lines.

Trader Level: Advanced

Risk Level: Medium

The basic concept is to follow a trend and enter a new CALL binary option if price

rebounds upwards from the lower trend-line when an underlying asset is rising in a

well-defined bullish channel. Alternatively, you should seek to activate new PUT

options when price reverses downwards after bouncing against the upper trend line

in a well-established bearish channel.

Up Trend-line Down Trend-line

The Yahoo chart above shows an Up

Trend-line. Points 1-4 indicate new lows

throughout the trend. It is an upward

trend-line because the new lows are

higher than the previous lows.

The Amazon chart above shows a Down

Trend-line. Points 1-4 indicate new

highs throughout the trend. It is a

downward trend-line because the new

highs are lower than the previous

highs.






Binary Option PUT Trades Using Follow-the-trend Strategy

I. Identify Trend: The above USD/CHF 1 minute trading chart clearly

displays a strong bearish trend.

II. Identify Upper Trend-line: Draw the upper trend-line by connecting the

series of lower highs.

III. Confirm Price Test: Once you observe the upper trend line, wait until

the present candlestick fully completes in order to confirm that it closes

beneath this trend line.

IV. Initiate Trade: Execute a USD/CHF PUT 60 Second Binary Option.

In the above example you could make four 60 second PUT trades in a period of

less than one hour. If you successfully followed the Follow-the-Trend Strategy

you would have profited on all four trades. If you had invested $100 on each

trade you would have earned up to $300 in less than an hour.

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10 BINARY OPTIONS STRATEGIES

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