When you want to trade binary options for constant returns, you need to know exactly what are you doing! Beside your Money Management and your binary options trading strategy, it is important to know when to trade, and when to avoid trading a specific market!
Table of Contents
Inside this blog post and Video, I will show you how to preselect the best market for your strategy in order to increase your winning rate as well as overall profit! Keep in mind that binary options trading starts with a proper trading strategy as well as a good money management, if you get one of both points wrong, you will lose your money!
Binary Options Trading Video – Find good trade opportunities
As you can see inside the video, it is possible to avoid bad markets and detect markets with a good chance that your strategy will work properly!
Markets to Avoid
Let’s take a closer look at markets I would avoid to trade for the most strategies, in fact, it always depends on the strategy! A News Trading strategy for example would wait to trade news and would avoid trading other markets, and a breakout strategy would look at markets with low movements, expecting a breakout in the near future!
Avoid News – Make sure to check the economic calendar at FX street regularly before you start trading. Avoid Assets with high impact news in the near future (The next hour)
Markets with No or Low Momentum / Movement – Do not trade normal binary options when there is no market movement! If you want to trade when markets are not moving, ensure to trade Ladder Options, click here to learn more! Another option for this market are short term binary options below 2 minutes expiration time!
Chaotic looking markets – If there are many candles with long wicks and, I recommend avoiding trading! Below is a picture gallery showing some examples for “bad” markets!
Ok, let’s take a look at a few examples of good-looking markets to trade!
The Power of Elliot Wave in Binary Options Trading
Try to detect the Elliot Wave Principle inside the chart, take a look at the picture below for more information about Elliot Wave :
Elliot Wave Theory: Simplified Explanation
Elliot Wave Theory is a popular technical analysis approach used in financial markets, and perfectly usable for binary options trading. It suggests that price movements exhibit repetitive patterns based on investor psychology. Here’s a simplified explanation with a short example below:
Elliott Wave Structure: According to this theory, price movements follow a five-wave pattern called an impulse wave, followed by a three-wave corrective wave.
Impulse Wave: An impulse wave consists of five sub-waves, labeled as 1, 2, 3, 4, and 5. Waves 1, 3, and 5 show the direction of the main trend, while waves 2 and 4 act as minor corrections.
Corrective Wave: Following the impulse wave, a three-wave correction occurs in the opposite direction of the main trend. It consists of waves A, B, and C.
Let’s consider a binary options trading scenario based on Elliot Wave Theory:
Assume we are analyzing an upward trend in the price of a stock.
As per Elliot Wave Theory, we would expect a five-wave impulse wave followed by a three-wave corrective wave.
In this case, we might look for an entry point during the corrective wave (waves A, B, or C).
To determine the entry, we would use other technical indicators or price patterns that suggest a potential reversal.
Once we spot a reliable signal indicating the completion of the corrective wave, we can enter a binary option trade in anticipation of the next impulse wave, aligning with the overall trend.
Remember that successful binary options trading involves a comprehensive understanding of various factors, and Elliot Wave Theory is just one tool in a trader’s toolbox. Always combine it with proper risk management and additional analysis techniques to improve your trading decisions.
Disclaimer: Trading involves risk, and binary options are speculative instruments. It is important to learn and practice before engaging in real money trading.
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