Binary Options Trading Tutorial (part 1)
www.twigstix.com/post/binary-options-trading-tutorial-part-1
Trading Binary Options can be a very rewarding way to make a considerable amount of money. Its slightly different from traditional forex trading as all you are doing is predicting whether the price of a certain asset will go up or down. You then wager so much of your balance, choose your direction and time frame and if you win, you get upto 94% returns on your initial trade. If you lose, you will also lose your initial investment.
Following our short tutorial, we will explain a relatively easy strategy that will help you make many successful trades. This is using areas of support and resistance on the chart and marking them out using the drawing tools on the platform.
The first thing to do is sign up (free) to a Binary Options platform before you follow our instructions. The platform we have chosen for you is Quotex which is probably one of the best we have ever used for trading Binary.
Go ahead and sign up...
Technical Analysis
When opening any charts (before you start trading) you need to do technical analysis and work out the direction of the market and how the market is moving. If the price is fluctuating too slow then its not exactly the best time to trade binary. Small candles also show that there's not enough movement in that specific pair, so its better to find another pair to trade.
The best market to trade with binary is a trending market; there are alot more opportunities and it makes it easier to draw your areas of interest (support and resistance). What your aiming to do with this strategy is trade the rejection on a candle that tests either the support or resistance areas of the chart.
Technical Analysis - Drawing areas of support and resistance
There are many ways to draw support and resistance lines on any chart depending on the price action of each pair. The lines that you draw have to touch (at least) 3 times at the top or bottom of each candle (rejection area) to qualify as a good area of support or resistance. Using the drawing tools on any trading platform you can then identify future areas of trading opportunities.
Technical Analysis - Drawing Horizontal Support & Resistance
The above chart shows that the general movement of price is in a sideways direction (consolidation). In this instant you can draw your support and resistance areas horizontally and wait for them to be tested before taking trades in the opposite direction.
The yellow circles show trading signals for price pullbacks for either binary or forex trading.
Notice that the price tests both the support and resistance 12 individual times before it finally breaks out. This gives plenty of winning trading opportunities
Binary Instructions:
▪️When the latest candle tests either the support or resistance areas, you need to place a trade for a 1 minute exploration in the opposite direction.
▪️Don't enter too early or when the pullback has already happened.
▪️Only invest between 2% and 5% of your balance on each trade.
Technical Analysis - Drawing Trending Support & Resistance
The above chart shows that the general movement of price is in an up-trend direction (trending). In this instant you can draw your support and resistance areas as shown and wait for them to be tested before taking trades in the opposite direction. The chart is set to 1 minute candles so for every candle seen here lasts for a 1 minute time frame.
The yellow circles show trading signals for price pullbacks for either binary or forex trading.
Notice that the price tests both the support and resistance 10 individual times before it finally breaks out. This gives plenty of winning trading opportunities.
Binary Instructions:
▪️When the latest candle tests either the support or resistance areas, you need to place a trade for a 1 minute exploration in the opposite direction.
▪️Don't enter too early or when the pullback has already happened.
▪️Only invest between 2% and 5% of your balance on each trade.
Technical Analysis - Drawing Down-Trend Support & Resistance
The above chart shows that the general movement of price is in a down-trend direction (trending). In this instant you can draw your support and resistance areas as shown and wait for them to be tested before taking trades in the opposite direction. The chart is set to 1 minute candles so for every candle seen here lasts for a 1 minute time frame.
The yellow circles show trading signals for price pullbacks for either binary or forex trading.
Notice that the price tests both the support and resistance 9 individual times before it finally breaks out. This gives plenty of winning trading opportunities.
Binary Instructions:
▪️When the latest candle tests either the support or resistance areas, you need to place a trade for a 1 minute exploration in the opposite direction.
▪️Don't enter too early or when the pullback has already happened.
▪️Only invest between 2% and 5% of your balance on each trade.
Technical Analysis - Drawing a triangle Pattern Support & Resistance
The above chart shows the support and resistance areas in a triangle pattern. The yellow circles are trading signals for price pullbacks for either binary or forex trading.
Notice the price comes down to the below support line (1) and gets rejected before re-testing (2) again. It then moves up to test the resistance level (3) before moving back down to test the support another 3 times (4)(5)(6). Another 3 trading opportunities follow (7)(8)(9) before the support is finally broken with 3 large bearish candles.
Binary Instructions:
▪️The distance between each candle will start getting smaller until there's a major breakout.
▪️When the latest candle tests either the support or resistance areas, you need to place a trade for a 1 minute exploration in the opposite direction.
▪️Don't enter too early or when the pullback has already happened.
▪️Only invest between 2% and 5% of your balance on each trade.
Trading the Breakout
Once the price has broken through the support, wait for the start of the next candle before taking a trade in the same direction. This will be your confirmation that price wants to move down.
Binary Instructions:
▪️When price breaks out in a big engulfing candle (shown above) wait for the next candle to start for confirmation.
▪️Take the trade in the same direction as the Breakout for 1 minute exploration
▪️Don't enter trade until confirmation of price bteakout.
▪️Only invest between 2% and 5% of your balance on each trade.
Please open your practice account on Quotex and practice the above tutorial until you are completely familiar with the trading platform and the tutorial strategy.
Part 2 coming shortly...