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Video – Trend Lines Binary Options strategy

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Video – The Breaking Line Binary Options strategy

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Video – The Rebound Line Binary Options strategy

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Video – Piercing Line Candlestick Pattern

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Video – Japanese Candlesticks Binary Options Strategy

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Use of Bollinger’s Band strategy in binary trading

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Binary Trading with Bollinger’s Band

Bollinger Bands – Bollinger Bands is a very popular technical indicator which defines a “normal” price range movement for every particular asset. When the price is out of the normal range it could be a signal for buying an option.

Why do we need it?

  • Define the entry points.

How to use?

  1. Choose the “Bollinger Bands” from the indicators list.Binary Options - Bollinger Band 1
  2. Without changing the settings, click “Apply”Binary Options - Bollinger Band 2

How does it work?

The Bollinger Bands represent 3 lines on the price chart, which may narrow or widen depending on the price volatility in the market. When the market is quiet, the Bollinger Bands are narrowing, but when there are abnormal price spikes, the Bollinger Bands expand their borders.

The central line is a simple moving average which is a standard period of 20 bars. Two other lines are the average lines with a certain number of standard deviations.

Bollinger Bands Strategy

“Bollinger Bands” is a trading strategy aimed at defining the trend reversal and the price pullback to the average price level.

Simple layout:

  1. Apply the Bollinger Bands indicator to the graph.
  2. Wait until the candle breaches above/below the upper or the lower Bollinger Band:
    • If the candle closes above the upper Bollinger band this will signal that the price will soon sink and return to its average – buy the put option.
    • If the candle closes below the lower Bollinger Band, this will signal that the price will soon move up and return to its average – buy the call option.

    Binary Options - Bollinger Band 3Binary Options - Bollinger Band 4

Advanced usage

The indicator is perfect for a sideways move (flat market). When the trend is strong, the price can move along the indicator border, yet at the end it will move back to its average. When the market moves sideways, the price often changes its dynamics. I t does not stop at the average level, but rather continues to move to the opposite border. After touching the border, the price begins its way up.

Narrowing the borders indicates a calm market, but after narrow consolidation the price always makes a sharp move. Very often, the indicator fails to react quickly, while the price breaches the borders and moves far beyond. Such moments are pretty dangerous for trading. The price will certainly move back to the average level, but the risks in such transactions are much higher.

Despite the apparent simplicity of the indicator, the Bollinger Bands is a powerful instrument for which can achieve excellent results. Please note that practical experience and a keen eye are extremely important when using technical indicators. These skills distinguish successful from novices traders. It should be also noted that the Bollinger Bands is not an all-purpose instrument and cannot be 100% correct.

Bollinger bands – Accurate signal

This strategy is designed to increase the Bollinger bands signals accuracy.

In order to increase the accuracy, we will support the signals provided by the regular Bollinger bands indicator by candlestick patterns.

Simple layout:

  1. Apply the “Bollinger bands” indicator to the graph.
  2. Wait for the moment when current candlestick (signal) breaks the upper or the lower Bollinger band above or below.
  3. Wait for the next candlestick to close after the signal:
    – If the candlestick closes in the same direction as the signal one (growing at uptrend, falling at downtrend), this signal should be ignored.
    – If the candlestick closed in the reverse direction, an option should to be bought.
    Call option is bought at the bounce off the lower Bollinger band.
    Put option is bought at the bounce off the higher Bollinger band.

Bollinger Band

Advanced usage

In this strategy, you can also use the shape of Japanese candlesticks to define reversal more clearly.

Linkage of the “Piercing Line” strategy, together with the bounce off the lower Bollinger band, will give a more accurate signal to trend reversal up and to buy a call option.

Linkage of the”Three black crows” strategy, together with bounce off the higher bound, will give a more accurate signal to trend reversal down and to sell a put option.

This educational material is courtesy of IQoption. Find out more here.
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Support, resistance and trend lines in Binary Option trading

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Trend Lines (Support, and Resistance) help identify the trend direction and the reversal points. There are three types of trends: “bullish” (price rise), “bearish” (price fall), “sideways” (price without change).

Why do we need it?

  • Defines direction of future price movements.
  • Determines the strength of the trend.
  • Defines the entry points.

How to use?

  1. Drawing the support line. The support line is a level from which the price will usually rise. Choose the“horizontal line” and draw this level on the chart.Support, resistance and trend lines 1
  2. Drawing the resistance line. The resistance line is a level from which the price will usually fall. Choose the “horizontal line” and draw this level on the chart.Support, resistance and trend lines 2

Breaking support/resistance lines strategy

Breaking a level – a simple trading strategy which talks about catching the price movement at the moment while it breaks support or resistance level. In this strategy we are going to look at two options of level breaking – “Breaking the support/resistance lines” and “Breaking the trend lines”.

Breaking support resistance lines:

  1. If the closing candle is above the resistance level, this increases the possibility of a quick price rally — buy call option.Support, resistance and trend lines 3
  2. If the closing candle is below the support line, this increases the possibility of a quick price fall – buy put option.Support, resistance and trend lines 4

Breaking trend line:

The trend line is a corridor formed by support and resistance lines. The asset price fluctuates within this corridor.

Trend lines:

  1. Drawing the trend line: Define the price corridor, within which the price either rises or falls. Choose the“Trend line” instrument and draw the corridor on the chart.Support, resistance and trend lines 5
  2. If the closing candle is below the support line, this increases the possibility of a quick price fall – buy put option.Support, resistance and trend lines 6
  3. If the closing candle is above the resistance level, this increases the possibility of a quick price rise – buycall option.3Support, resistance and trend lines 7

Rebound from support/resistance strategy

A rebound from the level is a trading strategy aimed at catching the price at the moment when it cannot break the support or resistance level.

A rebound from the support/resistance level:

  1. Drawing the price corridor::
    • Define the level, from which the price always rebounds up; choose the “horizontal line” instrument and draw this level on the chart.
    • Define the level, from which the price always rebounds down; choose the “horizontal line” , instrument and draw this level on the chart

    Support, resistance and trend lines 8

  2. If the price reaches the resistance level, and the first candle closes below this level, this indicates that the rebound possibility exceeds the growth possibility -buy put option.Support, resistance and trend lines 9
  3. If the price reaches the support level, and the first candle closes above this level, this indicates that the rebound possibility exceeds the growth possibility – buy call option.Support, resistance and trend lines 10

Advanced usage

The trend lines, like support and resistance can be applied to the chart only as they are approximate and drawn by you. In the price terms, this is an area, where thousands of market players place their buy and sell orders. Not all market players set the same price for the buy or sell orders that is why the price will not clearly rebound from your trend lines. They are drawn only on your screen.

On analyzing the break and rebound points, you shall understand that the signals can turn out false. For more accurate signals, we recommend you to use the support and resistance lines, as well as other indicators..

Resistance, Support, and the SMA:

  • Signal 1 — breaking the resistance level.
  • Signal 2 — the Moving Average indicates a clear uptrend.
  • Buy call option

Support, resistance and trend lines 11

Resistance, Support, and the RSI::

  • Signal 1 — breaching the support level.
  • Signal 2 — the RSI is above 70%.
  • Buy put option

Support, resistance and trend lines 12

https://www.youtube.com/watch?v=VtBpHjDf_kE

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How to use Japanese candlestick in Binary Trading

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https://www.youtube.com/watch?v=6wTkpdo9V50

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Japanese candlesticks are the most often used chart type.

Japanese candlesticks first used by Japanese rice traders over 200 years before the first charts appeared in America.

Why do we need them?

  • Help to analyze the price movements.
  • Define the entry points.

The Japanese candlesticks are very helpful in defining the chart patterns. These patterns can indicate a reversal or the trend continuation. Reversal or continuation of a trend enables the trader to make profit.

How to turn on the candles

1. Switch your chart into Japanese candles (10 seconds for Turbo options, 30 seconds for binary options)

Japanese candlestick in Binary Trading 1

2. The chart will be displayed on your platform, so you can start the analysis.

Japanese candlestick in Binary Trading 2-2

How does it work?

The Japanese candles consist of upper and lower shadows on the ends of the candlestick body. The candle represents an interval between the opening and closing prices. If the market moved up, the candle body is green; if the marked moved down, the candle body is red.

Japanese candlestick in Binary Trading 3

In the candlestick analysis, the trader’s main task is to identify the chart patterns. These patterns can predict reversal or continuation of a trend. If the trader notices that the market situation is changing, he will be able to quickly react and get more profit than those who see the trend in full swing.

There are a few simple strategies based on the candlestick analysis.

By using these strategies, you will be able to predict the trend reversal.

1. Piercing Line Candlestick Pattern (Uptrend)

“The Piercing Line pattern” – trading strategy that helps to determine the upward reversal on the downtrend (consisting of two candles).

Simple layout:

  1. Find two candles on the chart, one of which closes above the middle of the body of the previous descending candle.
  2. Wait for the second ascending candle.
  3. When the third ascending candle appears, buy call option.

Japanese candlestick in Binary Trading 2-4

2. Three Black Crows Strategy (Downtrend)

“Three black crows “ – trading strategy aimed at defining the downward reversal on the uptrend (consisting of long descending candles).

Simple layout:

  1. Find a strong uptrend consisting of several ascending (green) candles in a row;
  2. Wait for a reversal – three descending (red) candles in a row
  3. After closing the third candle, buy put option.

Japanese candlestick in Binary Trading 2-5

Advanced usage

The candlestick patterns are traditionally referred to as “reversal patterns” or “kicker patterns” as they warn about changing trends (not necessarily a reversal), when the trend graduates into a flat or the current movement slows down within one trend. For this reason, when using the candlestick patterns, we should also take into account other indicators like support and resistance levels, resistance, the Moving Averages, etc.

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RSI strategy used in Binary Trading

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The RSI

The RSI is one of the most popular oscillators which perfectly works on different market conditions and help us to define exact entrance points.

Why do we need it?

  • Defines the reversal/pullback points.
  • Defines the trend strength.

How to use it?

  1. Choose the “Relative Strength Index” from the list of indicators.RSI strategy 1
  2. Without changing the settings, click “Apply”RSI strategy 2

How does it work?

The RSI (Relative Strength Index) is a technical indicator and an oscillator following the price movements that ranges between 0 and 100. The RSI belongs to a group of the most popular oscillators. It is equally good for the market trends and the sideways moves. The RSI compares the latest asset price rise to the price fall and provides this information as a figure in the range from 0 to 100.

Overbuy (the indicator level is above 70%) – the market went up above the normal level and we are expecting the price will move down soon.

Oversell (the indicator level is below 30%) – the market went down below the normal level and we expecting the price will move up soon.

The RSI Strategy

  1. Apply the RSI indicator to the chart and choose a 26 period setting.
  2. Wait for a moment when the indicator clearly shows overbuy or oversell:
    • Overbuy – the indicator level is above 70% a trend reversal signal for buying the put option. .
    • Oversell – the indicator level is below 30% a trend reversal signal for buying the call option.

    RSI strategy 3

Advanced usage

Advanced application of the indicator:

  1. Divergence. The divergence signal is received in case of discrepancy between new highs or lows on the oscillator chart and the price. If the new high on the oscillator chart is below the previous one, while a new high on the price chart is above the previous one, we see discrepancy between the oscillator and the price. This signals upcoming uptrend reversal and subsequent sales. 2. Graphic patterns. Graphic patterns are often formed on the RSI chart (classic patterns) and are used by the traders for analyzing the price charts. .
  2. Graphic patterns. Graphic patterns are often formed on the RSI chart (classic patterns) and are used by the traders for analyzing the price charts.
  3. Support and resistance levels . on the RSI are often more clear than those on the price charts. Defining points following the max and min values of the oscillator.

Divergence + RSI

The problem of most technical indicators is the fact they are lagging. It happens because the calculation formula is attached to an instrument price, that is when the price starts rising, momentum makes the indicator move higher and vice versa. Therefore, false signals and delays are emerging.

An effective way to get over this disadvantage is to use divergence effect. Divergence occurs when there is a discrepancy between the price and the technical indicator, in brief, this is an indicator denial to confirm a higher price high. The price divergence is a reversal model, and for its detection the oscillator type indicators, like the RSI, are used.

Simple work layout:

  1. Apply the RSI indicator to the chart with a “21” period adjustment .
  2. Search the divergence between the current price direction and the indicator direction.

rsi

In the sample, after rising, the price formed a new high (1), at the same time, the RSI oscillator refused to follow the price and showed weakness (2). This is the divergence in its display, it indicates us that further direction change most likely will follow.

Advanced usage

There are several degrees of divergence: 2nd, 3rd, etc. The difference is in the number of tops and bottoms, forming the structure. The second-degree divergence is 2 tops (as in the sample above), the third degree is three tops and so on.. Here is a sample of a triple divergence:

rsi

While the divergence phenomenon is considered to be rather strong technical signal, one should remember about money management methods and trade risks. The indicator shows the market point, where is the probabilities offset, that is the chance for a favorable outcome in the deal becomes much higher, but it does not guarantee 100% profitable trades.

This educational material is courtesy of IQoption. Find out more here.
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Alligator’s strategy in binary option trading

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The “Alligator” is a very interesting indicator of market direction and periods of no trend. Its main goal is to determine the trend direction and its strength.

Why do we need it?

  • Defines the trend.
  • Defines the entry points.

The main function of the Alligator is to determine the trends: whether it’s the bullish (buyers) or the bearish (sellers) dominating the market, which means that the indicator can be used for the trending periods in the market.

How to use?

  1. Select the ‘Alligator’ indicator from the list of indicators.Alligator's strategy in binary option trading 1
  2. Without changing the settings, click ‘Apply’Alligator's strategy in binary option trading 2
  3. The indicator was reflected in your chart and is ready to use.

How does it work?

The mechanisms are pretty simple – the indicator represents a combination of three smooth Moving Averages indicating different time periods and moves. It is important that the Moving Averages are smooth rather than simple or belonging to any other type: they minimize the impact of the market noise and minor market fluctuations on the chart. Bill Williams called these Moving Averages the Balance Lines, as they show the price that would prevail in the market when no other factors intervene.

Each Moving Average received its own name:

  • Alligator’s Jaw
  • Alligator’s Teeth
  • Alligator’s Lips

The Alligator strategy

  1. Apply the Alligator indicator to the chart. You will see 3 lines of the Alligator’s “jaw”.
  2. The moment when the indicator lines are intertwined indicates that the Alligator is asleep. The longer it sleeps, the hungrier it becomes. This is a waiting period when the trading activity is inadvisable..
  3. Once the Alligator wakes up it begins to “yawn”, thus opening its “jaw.” This is the right moment for entering the market.
    • Opening the jaws up signals further growth and buying the call option.
    • Opening the jaws down signals further decline and buying the put option.
  4. Having eaten enough, the Alligator starts to lose its interest in “food” and the indicator lines are intertwined again. This sends signal to end the trade and wait for the next signal.Alligator's strategy in binary option trading 3

Advanced usage

Important notice: Like any other method of technical analysis, the Alligator indicator may show delayed signals. False signals may also occur; therefore the Alligator requires maximum optimization, according to certain market conditions and certain assets.

    • After selecting the Alligator indicator, you will see the settings page.

Alligator's strategy in binary option trading 4

  • On increasing the number of periods, the Alligator becomes optimized for a more volatile market. The indicator will provide fewer, yet more accurate signals.
  • On decreasing the number of periods, the Alligator becomes optimized for the trending market. The indicator will provide more signals, but the accuracy will depend on the trend strength.

The most widely used Alligator settings:

A volatile market or asset :

Alligator's strategy in binary option trading 5Alligator's strategy in binary option trading 6

Trending market or asset:

Alligator's strategy in binary option trading 7Alligator's strategy in binary option trading 8

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Binary Option – how to trade?

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With the spread of Internet technology, more people gained access to online trading in the financial markets, which soon became the source of their primary income. Investment and speculative tasks became much closer to an ordinary people than ever; now, anyone can join the investment community and make investments in the financial markets. After individual traders, attracted by simplicity, entered the world of trading, the market activity reached a new level – the simplification of a financial sphere and trading in the financial markets. Now you can feel the sense of Wall Street trading and participate in this type of activity. Financial markets have NEVER been so accessible as in the era of binary options trading.

The rules applied for binary options can also work in Forex trading, stock market, derivatives, and other financial instruments. On understanding how to trade, analyze the market, manage your investments and discipline, you should turn to more professional.

Binary options are a great starting point on the way to professional trading!

Trading on a Free Demo account

  • After registration and account activation choose Turbo Options on the left side of the panelFree Demo account 1
  • You will see the Asset Index – the currency pairs, stocks, and indices. Select the asset you want to trade and start trading.Free Demo account 2
  • Choose which direction the asset price will move on the chart: up or down (more information on how to define the direction will be provided in the following sections).Free Demo account 3
  • Enter the desired investment amount and expiry time for the transactionFree Demo account 4
  • Buy call option or put option depending on your forecast.Free Demo account 5
  • Wait until expiration; if the forecast is correct, you will receive a fixed payout in case of correct prediction / successful trade.Free Demo account 6

Trade real money:

  • Click on “Make a deposit” on the control panel .Free Demo account 7
  • Choose the payment method . After making a deposit, your Demo Account will upgraded into a Real Account.Free Demo account 8
  • To withdraw the funds, select My Account – “Withdraw”.Free Demo account 9
  • Fill out an application form, and get your money within 3 business days.

Withdrawal iq option

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SMA Strategies

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Moving Average is a general name for a group of functions where the values at each point are equal to the average value of the initial function for the previous period.

Moving Average is one of the simplest technical analysis tools and one of the most popular indicators among traders of different levels. The price always tends to its average value – the balance point between sellers and buyers. This indicator is the basis for a variety of trading strategies and indicators.

Why do we need it?

  • Defines the trend.
  • Defines the entry point..

How to use?

  1. Choose the “Moving Average” (MA) indicator from the list of indicators.SMA 1
  2. Choose the line type – SMA.SMA 2
  3. Without changing the settings, click “Apply”.

Breaking the SMA strategy

Breaking the SMA strategy – trading strategy aimed at determining the trend reversal or ending of the flat movement.

Simple layout:

1. Apply the SMA indicator to the chart.

2. Wait for the moment when the candle breaches above or below the SMA line:

  • If the candle closes above the MA, this will signal further growth and buying the call option.
  • If the candle closes below the MA, this will signal further fall and buying the put option.

SMA 3

Rebound from the SMA Strategy

Rebound from the SMA – a trading strategy, which defines the point for returning to the trend corridor or a sideways movement.

Simple layout:

  1. Apply the SMA indicator to the chart.
  2. Wait for a moment when the candles indicating the price movement touches the SМА line, while the next candle goes in the opposite direction.
    • Closing the second candle (after the descending, that touched the SМА) above the SМАsignals further growth and buying the call option.
    • Closing the second candle (after the descending , candle that touched the SМА) above the SМА signals further fall and buying the put option.

    SMA 4

Advanced usage

Apart from the methods mentioned above, there are many other ways of using the SMA:

  1. Crossing other long-term MA:

    For example, if a short-term MA (14) breaches a long-term MA (26) from the bottom up and holds above the average, this is a signal to open positions considering a up trend.

    SMA 5

  2. Defining the trend direction:

    Using the basic characteristics of the MA – defining the trend direction. The MA clearly indicates the trend direction; the steeper the slope is, the stronger the trend is. This strategy can also be applied for building trading strategies. If the MA is moving up, and the price is above the MA, this indicates the uptrend and our target will be to find the entry points on the way up. If the MA moves down, and the price is below the line, this means that the trend is descending, and we should be looking for the entry points and opening the bearish transactions.

    SMA 6

https://www.youtube.com/watch?v=jeZHCd4IqS8


https://www.youtube.com/watch?v=VtBpHjDf_kE

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General Risk Warning: The financial services provided by this website carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose