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BINARY OPTIONS ARTICLE Benefits Of A Profitable Scalping Strategy For Binary Options

Novice traders are often interested in how they can predict further price movement (up or down) in the next few minutes. It turns out that this is...
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    Benefits of a profitable scalping strategy for binary options

    Novice traders are often interested in how they can predict further price movement (up or down) in the next few minutes. It turns out that this is quite real. Profits can be made from the smallest price fluctuations. During the entire trading day, any asset usually makes 2 or 3 significant movements in one direction or another. However, there are many price fluctuations up and down, allowing scalpers to get decent earnings.
    Knowing this, some not quite decent brokerage companies do their best to prevent their clients from conducting such short-term transactions. But scalping options are quite available from serious and time-tested brokers.

    For beginners, such short-term trading is very useful by acquiring certain skills:
    • there is experience to quickly and skillfully make decisions in extreme situations that are often encountered in financial markets;
    • the trading platform and its capabilities are being studied quite quickly;
    • in a short period of time, novice traders get their first profit.
    It is very important, because such scalping on binary options can give you up to 80% profit. And it can be obtained by trading with a minimum expiration time.
    Such trading will be profitable when using a certain balance of computer indicators. When applying this set, it is important to follow a clear logical flow of actions.

    Here are the basic conditions for the successful application of the scalping method for binary options:
    • major currency pairs and gold should be instruments of such trading, since they are highly volatile (this is very important);
    • the trading timeframe must be one minute or five;
    • should trade in the European or American session;
    • you need to apply risk management;
    • you should take seriously the selection of a broker who is an intermediary between the trader and the market;
    • the choice of expiration time depends on the current market situation.
    It should be added that there are various methods of binary scalping: with or without indicators.

    Binary Options Scalping Indicators

    Although many traders consider short-term option trading to be a very risky type of trading, using proven indicators in it reduces risk many times over.

    The most reliable helpers from the general list of tools are the following:
    • a pair of exponential moving averages with periods of 5 and 10;
    • Relative Strength Index (RSI), default settings;
    • Stochastic Oscillator with setting values 14, 3, 3.
    The listed set of indicators is quite common and acceptable with a scalping strategy for any trading platform, including binary broker software.

    The most significant role is played by a pair of the above exponential "movings". Their intersection reflects a change in short-term trends. This very moment is the main factor for entering a trade. RSI acts as a filter displaying the results on the screen of a trading terminal relative to the important level 50. "Stochastic" is an additional tool designed to confirm the main signal.

    Indicator signals for opening a trade

    In binary options trading, it is possible to purchase a Call option (price increase within a specified time frame) and a Put option (a price decrease within a specified time frame).

    as1.JPG

    An up signal, or buying a Call option, appears when a number of conditions are met:
    • the red sliding line crossed the green one from the bottom up;
    • the relative strength index is above the 50 level;
    • the fast line "Stochastic" crossed the slow (dotted) line upward.
    Before buying a Call option, be sure to take into account the market situation. With low volatility, the expiration time should be increased.

    as2.JPG

    A down signal, or buying a Put option, is also generated when certain factors are present:
    • the red “moving” crossed the green one from top to bottom;
    • RSI is below 50;
    • the fast line of the stochastic oscillator crosses the slow one from top to bottom.
    When entering a trade, it is important to take into account the volatility of the traded asset.
    When using the above indicator signals, remember that options trading strategy like scalping is not suitable for everyone. By buying a Put or Call option, with insufficient analysis of the market situation, and showing incontinence instead of composure, a trader turns sensible trading into a gamble. At the same time, the chances of getting a profit are much reduced.

    Scalping without indicators

    When creating a strategy for such scalping for binary options, you can do without using indicators. In this case, trades with a trend are applied.

    For effective trading with this method, three factors are required:
    • a very "mobile" currency pair, in which the tendency rises or falls sharply;
    • a clear mechanism that determines this trend;
    • accurate market entry.
    To achieve high accuracy of entry, you should make short-term trades along the trend with a minimum expiration time. Moreover, you need to start at the rollback of the asset price.

    as3.JPG

    The figure shows an uptrend on a one-minute time frame. Its movement is shown by arrows, which show the direction in which trading operations should be performed. To accurately determine this direction, you should use the support and resistance levels.

    The oval markings above the arrows represent resistances. Similar ovals under the arrows are support. Each subsequent maximum of support is higher than the previous one. The same happens with resistance extremes. Having determined in which direction the market is moving, you should choose the moment of buying a binary option with an exercise time of 5 minutes. In this case, you need to start buying Call exactly at the moment when the trend, having completed the next correction, changes direction in the direction of the main movement.

    In the case of a downward trend, they act in a similar way. It is important to remember that you should not choose an expiration time below 5 minutes, because sometimes the price can remain at the same level for 1 or 2 minutes without moving a single point up or down.

    In addition, any trader should understand that it will not be possible to completely avoid losing trades. With proper use of the scalping strategy for binary options, the number of profitable trades is likely to significantly dominate the number of unprofitable ones.
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