Trading Articles

It's a Bird, It's a Plane, It's the Martingale Strategy

Being a binary options trader, your primary goal is to always place successful trades in order to earn higher profits. This can only be done if you devise the right strategy by keeping in mind the current trends and formation of patterns in the binary options market, as it enables you manage your investments and place your trades wisely.

Among many other binary options strategies, traders also use two strategies called a Martingale strategy and the Anti-martingale strategy.

Martingale Strategy

Martingale strategy is used if a trader raises the bet two times the normal bet after the previous bet fails. As a result, a trader is able to get a winning trade. This strategy is based on the expectation that by doubling the bet, previous losses will be compensated and a trader will receive his allowed profit. However, being a binary options trader, when you use this strategy, make sure that not only you double all the previous bets, but also the aggregate of every bet that was lost. It can also be understood with the help of a following example:

Stop, Drop and Trade!

This strategy is somewhat similar to the Pop and Stop trading strategy, because a lot of principles associated with this strategy are the same as used in Pop and Stop trading.

If you look at the chart, you can see a channel breakout trading pattern, which is favorable when the market opens. At the right side of the chart, a price moving in an upward direction can be seen over a narrow range on the left side. Although, it was not possible to have the entries at this point using the pop and stop strategy, yet, an evening star candlestick pattern was created by the price at the weekly pivot point (shown as blue line). Based on other confluences, you can enter a short trade once the first long candle is down.

Going Deeper into the Forex Fractal...

The Forex Fractal is related to the consolidation and channeling of price, which is observed by most of the traders in the forex market. In fact, the major market players keep a keen eye on channels’ boundaries. As a result, support/resistance levels appear on a trading chart.

In literal terms, Fractal means a geometric formation that recurs at a smaller level so that asymmetrical patterns and surfaces can be created, which cannot be shown by traditional geometry. It is just like Fibonacci patterns that can be seen in the arts, nature and even in trading. Many a times when a trader selects any pattern on a 5 minute forex chart, he can see the same pattern forming on higher time frames. Mostly, these trends or patterns lie within a same span of time on these higher frames of time.

Overlapping Fibonacci in Forex Trading

The Overlapping Fibonacci is usually the next step for traders after they have already used the Fibonacci retracement signals in forex trading many times. In this strategy, traders use the confluence of Fibonacci extensions or retracements with other indicators, such as, pivot points, and resistance or support level etc.

The idea of using overlapping Fibonacci strategy is quite exhilarating because this is exactly what you need in forex trading. In this strategy, a trader gets to trade two strong Fibonacci points at a known resistance and support region, and will probably get a usable reaction from it. Traders find it very simple to use and therefore, they prefer to use it instead of any other trading strategy.

In order to understand it more clearly, let’s take an example of a chart that will be explaining the overlapping Fibonacci patterns in detail. A trader can use any chart that shows a reasonable highs and lows of prices in combination with other moderate level retracements that appear throughout the way and form Fibonacci signals on the chart.

What's a Dual Stochastic Signal?

In a forex dual stochastic trade, slow and fast stochastic signals are combined with one another and then traders look for the right time when the signals reach the opposite extremes. The points at 80 percent and 20 percent are usually considered to be the extreme levels. Another measure used for this strategy is the 20 EMA.

In the following examples, you can see the combination of fast and slow Stochastics in one window at the end of the chart. It is very easy to use this strategy and in order to use it correctly, you should start by placing one of the two stochastic signals on the chart and then move the next signal from the navigator window and put it right above the first stochastic signal.

There are certain rules that a forex trader should remember while using this strategy, and these rules are as follows:

• He should wait till the price reaches the point where it shows strong trending.
• Make sure that Stochastic signals are at opposite extremes
• In order to confirm the entry, find a suitable candle pattern that gives an indication of reversal after a brief retracement to the 20 EMA.

Getting Advanced with Bladerunner Strategy

The most suitable price action strategy in Forex trading is the Bladerunner strategy, because this strategy uses the price actions in order to find entries. Usually traders use it in combination with round numbers, candlesticks, pivot points, and resistance and support level.

Moreover, you do not need to have any indicators, such as, RSI, MACD, and Stochastics to use the Bladerunner strategy. These indicators are also known as the off-chart indicators. However, you can use your favourite indicators if you are confident about them. For example, some people trade this strategy along with the Fibonacci levels, which is completely fine as long as you are comfortable with it.

Your Daily Fibonacci Pivot Strategy

This strategy is used to enter the trade by confluencing the daily pivot points and Fibonacci retracements. Some of the favorable parameters used by the traders are 38 percent or 50 percent Fibonacci points that are in confluence with the daily pivots. Like any other free forex trading strategy, this strategy can be interpreted in many different ways as there are many variations to it. However, experienced traders use the daily Fibonacci pivot strategy to increase the chances of opportunities that comes with relaxing the trade entry requirements in a following ways:

• Find a trade entry of a currency pair, which shows that the average true range of previous 5 days exceeds the trading sessions of the past few days.
• And draw fibs at the beginning of the current session, from the last few days low to high in case the price is currently more than the current central pivot point. Or, from high to low of the last few days if the current price is lower than the current central pivot level.
• Find a confluence of daily central pivot level and Fibonacci retracement points.
• Once the price is identified after retracing to the confluence, a trader enters the trade or wait for the confirmed candle signals in order to confluence before the entry. Although, entering the trade before a confirmed signal is very risky, yet, higher risk is associated with higher returns.

What's Caught in Your Net?

Range trading holds a bit of risk when it comes to trading stocks. The risk is involved especially if a trader, with the help of powerful support, comes across a stock. For trading in a range-trading market, you should point out price-range which is being traded within by security. It involves regulating the level of support. This level is a specific price which is touched by security that has not gone through. Another task you have to do is regulating a level of resistance. This level is a price-range that remains above the trading-range. Just reach out both levels twice. It is a strategy to boost up your confidence. You should reach out the levels a good number of times and build up a trust that they will work well in coming times.

Now making money from it is very simple. You should buy at the level of support. Then you should sell at the other level. Make a sale short at the level of resistance. Then wait and buy to cover at the moment the price lowers to the level of support. Traders should keep their eyes open for breakouts. Leave the price to reach out the line of support or resistance. Make an order of buy stop/sell stop type at a distance from the line. It will be pushed when the price returns. It is a mean of protection against breakout.

Start Building Your Own Strategy Today!

Binary option trading has become very popular among online traders due to its flexibility. Everyone can trade easily because the requirements are very few. There are various ready-to-implement strategies that are quick solutions to trading problems, but the real success can only be achieved by following a customized strategy that suits your skills and abilities.

Cook the best trading strategy:

Below is the step-by-step guide on how you can build yourself the most successful trading strategy without much trouble. It is not compulsory to use the following guidelines, but it can help if you are unsure what to do.

How Does the Parabolic Strategy Work?

The sudden rise in fame of binary option trading in just a few years and all the success everyone dreams of getting with this business sometimes leads even experienced traders to lose focus. Sticking with your trading plan and strategy is very vital to remain on-course and to keep receiving profits for a long time.

Unveiling the Parabolic strategy:

Trading strategies are the best ways to ensure you get the most out of your binary option business. Parabolic strategy is not a new one but most of the traders are unaware of it. The strategy was earlier successfully used in other financial investment ventures and it was adapted by experienced analysts for binary option trading.