“Scalping”?
Scalping is a short term trading with the aim of obtaining profits on small time frames from 30 seconds to 5 minutes, sometimes a bit more.
To understand what is scalping in binary options, let’s make a little comparison with long-term trading.
Often traders trade on higher timeframes beginning from H4 and ending with the weekly charts. That is, the expiry time can vary from half of a day to a few months.
If we talk about scalping in the binary options market, it implies the opening of a large number of short-term transactions in PUT and CALL at different or same asset within the same trading day.
Scalping
In this article, we will consider concepts such as: scalping with binary options, trading rules, types of scalping strategies, scalping market depth, examples of best strategies for scalping, and so on.
Scalping with binary options: trading rules
Scalping on binary options
Scalping in binary options market involves trading on small time frames, like M1-M5. Some people manage to scalp a market on turbooptions. By the way, for this reason there is a simple but profitable strategy for turbooptions. Although some trade on time frames M30-H1. The more the timeframe, the more accurate the signals are processed. It is a proven truth.
Don’t be afraid to experiment. If you are dodn’t manage to trade in plus on small timeframes, you may make money on the older time intervals.
Try to consider the trading signals in the direction of the global trend. For example, if trading on M5, then look in which direction the trend on the H1 timeframe is moved.
And remember that scalping in binary options is a risky thing. Therefore, the deposit should always have cash reserves.
Do not worry, if the deal is unprofitable. Certainly subsequent trades will be profitable, if scalper trader does not deviate from his trading strategy.
To recover lost, usually the method of martingale will help. With proper use, it is possible not only to leave a losing trade but also to earn something.
Follow risk management. That is, do not risk one deal a significant portion (20-50%) of the deposit. The rate on each trade is 2-5% of the total deposit.
Create a trading plan that will always be in a prominent place to stop the trade. Every trader who is scalping in the market of binary options has its own plan. Someone stops trading after 2 or 3 profitable trades, and someone has 5 deals.
Do not be greedy. Everything should have a measure. Earned $50 or $100, do not trade more, as the excitement sooner or later take its toll.
Well, the last rule of trading for scalping: a trader must have a proven trading system on which he scalps the market. Most importantly, stick to its rules.
Types of scalping strategies
Before describing the types of scalping strategies, you should know that they require the following conditions:
- there should be high liquidity;
- the tool should have a high, but controlled volatility;
- stock quotes that are delivered to the terminal must be correct and complete;
- broker with low commissions or spreads;
- all trading orders should be executed fast.
Note that scalping, including in the market of binary options, involves the execution of a trader’s psychological stability, as well as careful execution of capital management.
Systems for classic scalping
Classic Scalping
If we talk about classic scalping strategy, its application implies opening of orders when the market formed the difference between supply and demand. Thus, this imbalance is causing volatile price movements, which itself can be used for profit.
This scalping strategy performs well when trading futures on stocks.
The main advantage of a classic scalping is that with it you can track the status of transactions of all participants in the exchange market. It’s kind of a table of values, using which the classic scalping can be profitable.
Traders believe that if a person is able to “read” the DOM, so he has 50% of the success in his pocket. For profitable scalping using depth of market, this skill is simply necessary.
The trader should be interested in large applications, the value of which originates with 200 or more units. Large application – the signal that the big players entered the game. They are known to be always driving the market. So where they go, we follow.
In other words, when you see a large bid to buy, starting from 200 and above the base units. So you need to open a buy trade and Vice versa. In binary options this type of option is CALL.
Trend scalping, sliding trade or trade from the levels inside
Sliding trade or trading from the levels inside the trading day, and trend scalping involves finding potentially profitable areas on the chart where there is a retracement, and then there is the continued movement in a particular direction.
Usually it not possible to open trades according to this strategy, because it has to run suitable conditions for their discovery. For example, the price reached a certain level, bounced off it or a while “trampled” on its borders. It is therefore advisable to choose the expiry time from 15 minutes.
Scalping from the strong levels
As you can see, this trading system works and so you need to try to use it in scalping in binary options.
Scaling on strategy on rebound
Impulse or so-called breakout scalping
Breakout or impulse scalping involves search of the strongest price movements through technical analysis. They can be seen by applying certain indicators. Breakout or impulse scalping with binary options is very popular among traders.
Breakout scalping strategy BO
Examples of best strategies for scalping
Next, we present examples of the three best, in my opinion, strategies for scalping in the binary options market. They also are the explanations for buying (CALL) and selling (PUT).
Universal trading strategy Trend action with fractal support/resistance
This trading system can be used not only for Forex but also for binary options.
It is used for all currency pairs. Trading hours: London, New York.
What indicators contains Trend action with fractal support/resistance strategy?
- Fractal Support and resistance;
- MA in color (100, 3);
- Pivot and psycolevel;
- Volumes indicator;
- Support and resistance;
- Non lag MA (35);
- Heiken Ashi histogram;
- Clive histogram CCI.
Here is how it looks on the chart:
Trend action with fractal support/resistance strategy
Conditions for the purchase of the PUT option(below)
- Red Non lag MA (35) must be below the red line MA in color (100, 3).
- Bearish red candle closes below the Non lag MA (35).
- TrendCCI indicator changed the green color to red.
- Heiken Ashi Histogram also took red and touches the moving average.
- Volumes indicator also highlighted in red.
The expiration time: three candles or 15 minutes.
Rules for sale by Trend action with fractal support-resistance strategy
Conditions for the purchase of a CALL option(above)
To purchase option type of CALL following conditions should be met:
- Green Non lag MA (35) crosses green MA in color (100, 3).
- Bullish blue candle closed above Non lag MA (35).
- TrendCCI changed the color from red to green.
- Heiken Ashi Histogram of blue color and it breaks or touches the moving average.
- Volumes indicator highlighted in green.
On the chart it looks like this:
Rules for buying by Trend action with fractal support-resistance strategy
Universal trend strategy “Dream of the scalper”
This trading system I invented in the course of writing this article. So we can assume its author one. It has only three indicator:
- Moving Average with a period of 9.
- Heiken Ashi Histogram.
- MACD (13, 26, 9).
Conditions for the purchase of an option type CALL (above)
- The price is above the moving average MA.
- Heiken Ashi Histogram has a blue color and breaks above the blue moving average.
- MACD has a value greater than zero.
Rules for buying on the strategy of “Dream of the scalper”
Conditions for the purchase of the option type PUT(below)
- The price is under the moving average MA.
- Heiken Ashi Histogram highlighted in red and breaks blue moving average.
- MACD has a value less than zero.
Rules for sale by the strategy “Dream of the scalper”
As you can see, nothing complicated. The main thing for a profitable trade in binary options is to follow the rules of the trading system.
Binary options strategy Binary Cash (Comodo)
Another good strategy for the binary options market, which is often used by fans of scalping.
It can be used only for the four currency pairs:
- EUR/USD.
- USD/JPY.
- USD/CHF.
- NZD/USD.
Timeframe on which the analysis is performed – М5.
Binary Cash (Comodo) strategy works best 9.00 to 21.00 Moscow time. During important news it is better not to trade 30 minutes before and after.
It looks the following way:
Binary Cash (Comodo) strategy
Conditions for the purchase of an option type CALL (above)
As soon as green up arrow and a signal appear, – buy a CALL option, the expiry time of 15 minutes.
Conditions for the purchase of an option type CALL (above)
Conditions for the purchase of the option type PUT(below)
Wait when you see the red down arrow with a beep, and then buy a PUT option. Expiry time 15 minutes.
Conditions for the purchase of the option type PUT(below)
The basis of success in scalping
In order to make scalping in binary options trading profitable, you need to adhere to certain rules:
- do not deviate from the conditions of proven trading strategy;
- control losses;
- not to be greedy (to have a sense of proportion);
- choose a reliable binary options broker.
- keep a diary of transactions;
- conduct analysis of mistakes;
- do not trade during emotional arousal.
- To have endurance.
If these recommendations are implemented, scalping in binary options will always be profitable.
