Every novice trader would like to get such strategy, which would bring almost 100% of the profits. But what is binary options trading? It is buying or selling of an asset in order to profit from changes in its price. So, if someone earns, someone loses money, while maintaining market equilibrium.
Grail of binary options is a success of a trader, obtained exclusively by the achievements of theoretical and practical knowledge, their skilled application and continuous self-improvement. Someone spends on understanding of the principles a year, someone a few years, but there is no one who could be able to earn from the first attempt. How to go from start to Grail and find your own path to success, read on.
- 1 What is the Grail?
- 2 An example of successful strategy in binary options
- 3 Summary.
What is the Grail?
Grail of binary options — a term that was initially considered as a joke. It meant the comparison of unsuccessful search of crusaders, adventurers and archaeologists to find a sacred bowl with the attempts of traders to find a single successful break-even strategy. Later the term became more specific: under the Grail began to imply a trading strategy, which not only bring the trader to a stable income, but doesn’t not require a lot of time and psychological stress.
Grail and binary options
Single Grail of binary options does not exist, each finds for himself. But to find it you need to exercise maximum patience and continuously work on yourself and your own experience. We will give some tips that will bring you closer to the cherished dream of obtaining a stable income.
The path to the Holy Grail of binary options:
- continuous training. First acquaintance with options trading starts with learning the basics of technical and fundamental analysis. When applying the technical tools, a trader needs to understand the meaning of the indicator settings and how they work. You need to understand what fundamental factors affect the asset (in certain periods they can be stronger than technical analysis). Training involves participation in seminars, webinars, discussion forums, testing new strategies etc.;
- practical experience. The acquired knowledge should be immediately hone in practice first on demo account then on real market. You can learn from the experience of professional traders, but do not hope that the mindless copying of deals will bring the same income;
- own system of risk management. As long as such thing as “equity”, “bctest”, “lot”, “allowable risk per trade”, “expectation”, “MyFxBook”, etc. say nothing to you, in any case do not go to real trading. Binary options is not just about implementing the strategy as written in the description. It is also stringent requirements for the selection of the amount of deposit, and the decision on early closure or doubling;
- psychological stability. Not always the most profitable strategy will be profitable. Trader should not lose a temper, he should be able to accept the losses, not to seek to recoup, and with a cool mind to analyze the causes. In case of success not to fall into the excitement and euphoria — they lead to relaxation and errors;
- correctly selected strategy. Every Grail of binary options is only in a certain period of time. There is no universal strategy that will work always. Some of the tactics successful in trending markets, the other on long time frames, etc. You only need to find the appropriate tactics or create your own;
- honest broker. Broker who will be interested in his customers is another important component. You need not only to make money but also to withdraw money. Examples of trusted brokers you can find here.
Hopefully, these tips will come in handy. And as a small example we will give you the example of one of the most successful strategies from analysts of Investlb.com.
An example of successful strategy in binary options
Given below is an example of a strategy is not a 100% guarantee of profit. This tactic is largely successful, but it works in trending markets. In addition, the practice may be slightly different from the theory, an example of what you will see below.
Timeframe and expiry times
There is no optimal timeframe. You can successfully operate with minute and hour time frame. In the practical example below, both timeframes were aggregated for understanding the movement of the moving average. The expiration time was taken equal to the moment for short time frames during this time, the trend has no time to fully regain its strength.
Indicators of a successful strategy
The strategy is based on the classical indicators. SMA with a period of 15 displays the dynamics of price changes. Stochastic oscillator helps to determine overbought and oversold if the indicator is above level 80 — soon to be a reversal down, below the level of 20 turn up.
Conditions for opening a buy position
- moving average is directed upwards;
- the stochastic oscillator is in the oversold area, turned around and stochastic lines crossed.
Conditions for opening sell positions
- moving average is directed downwards;
the stochastic oscillator is in the oversold area, turned around and stochastic lines crossed.
A practical example of application of the strategy
In practice, trade is somewhat more complicated than in theory. We open the first transaction when the stochastics is at the bottom and ready to turn up. But the moving average does not give accurate confirmation to enter. After analyzing the hour and minute time frames come to the conclusion that the position could still be opened (it is clear that moving is not pronounced downward movement and is ready to reverse). And, despite the fact that moving still directed down, open a minute option to increase.
Expectations did not disappoint us, stochastic abruptly pulled up, and the moving average goes with it. The caveat of such strategies that the trader must make an instant decision based on signals and not to enter the market with a delay when the stochastics is already above in the area of 20-80.
Open the second trade on the same principle (the timeframe is increased for clarity). Look at stochastic — it is in the overbought area and turns down. Waiting for a signal from the moving, but here it shows no decline, but rather increases. Despite the fact that this point is considered a failure to enter the market, analyze different timeframes and risk to trust the stochastic.
And again it doesn’t let us down! After minor fluctuations in the overbought zone it goes down, bringing us money, and by the end of the option expiry takes place and sliding down. Minute option is enough to win back the correction of the trend. This is another example of what a professional trader should be able to see the nature of the trend in advance, and this is possible only on the basis of experience and intuition.
In just 5 minutes we made 2 profitable trades.
- Important: the strategy was risky, because we do not have to wait for 100% matches of the required conditions. In particular, in the second example, moving later responded to an overbought asset. This was done in order to show the possibility, on the basis of experience earn in 5 minutes on 2 transactions. If we waited for full match conditions, it would enter the market with a lag. It is permissible for professionals. Novice traders are recommended to strictly adhere to the rules specified in the previous section and patiently wait on the regulator’s strict compliance with the matching indicators.
Grail of binary options is not simply following the recommendations of the strategy or basic knowledge of technical analysis. This is the experience, courage, risk tolerance, and an intuitive understanding of the market. The market is changeable and dynamic, so no single strategy is able to work 100%. And not always strict observance of the rules can bring success. Only an understanding of the principles of strategy, risk management, understanding which strategy rules you can break and which not and at what point can lead to success.
We invite you for discussion! Share your own Grail with our readers and find out what professionals think about it!