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Lesson 9 – Touch Options

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TOUCH OPTIONS

Before starting, let’s just point out that the term “Touch” stands for “touch” in the sense of “touching”, “reaching” and therefore the Touch options have the particularity of being linked to a dynamic of touches. Let’s see in what sense, but first we define two types of binary options Touch:

  • One Touch Options
  • Touch / No Touch Options

As you can see in the first type we talk about a single touch, while in the second we talk about a “touch / no touch”. Let’s see together what these types of options consist of in more detail.

One Touch Binary Options

With the One Touch options the trader has to predict if the price of a given asset will touch once (and only once) a certain level, a given price. For example, if the quotation of an asset we have chosen is 45.6 and the one touch level is at 46, the trader will have to predict if the prices of the asset will touch only once that certain level (46). An example could be a rise, which continues to take place even after the option expires. Imagine a climb from 45 to 47 without a downside, you simply have a pass to 46 that continues towards 47 without retracing his steps.

Binary Options Touch / No Touch

With the Touch / No Touch binary options , the trader simply has to predict if the price of the selected underlying touches or does not touch a certain price, a certain level. For example, if the quote is at 45.6 and the touch level is at 46 the trader will have to predict if the price of the asset will break the level at least once , or not. The difference with the “One Touch” options lies in the fact that this level can also be touched several times. With the Touch / No Touch options you have two advantages:

  1. If you touch the Touch and the touch arrives “soon”, you can proceed immediately with another operation, perhaps taking advantage of the same trend
  2. If you touch the Touch and occur at a change of direction opposite to that with which you arrived at the touch, the operation is not affected as in the case of “One touch”. For example, if 45.6 comes to 47 and then returns down. the fact that retouching 46 does not change anything at all.

Let’s practice

Option brokers always offer demo platforms to practice, so if you do not have a few clear passages, try them out practicing with virtual money. Binary options brokers allow you to use a demo platform only after opening an account and making a deposit, which you can still use to trade in real mode.

Go to lesson 10 – Binary Options Range

Lesson 17 – Digital Options

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digital options

The Digital Options are a new product offered by the trading platform IQ Option . This is an innovative and surprising product, which we have personally tested and will give you a practical example in this article, with screenshots and explanations. If you do not have time or want to read, here are the main advantages:

  • Profitability up to 900%
  • Possibility to choose the degree of difficulty of the option
  • Possibility to sell the option at any time
  • All operations with a single click

You are wondering “but it is not a bit exaggerated”. No, it’s exactly as we reported above. This is a new type of option , which in fact goes to draw from the best features of various types of options, such as those range and touch, but in fact can not be framed with either one or the other.

It is therefore a new type of binary option, with which to seek profit from the rise and fall of the price of assets on which you are trading.

To try it now, access the IQ Option platform . If you are not yet registered, you can try it in free demo mode , without deposit required, practicing with virtual money .

Binary option and digital option

When digital options were launched a few days ago , we immediately wondered what the novelty was, since in fact binary option and digital option up to some time ago were synonymous, as it is still possible to verify from the Wikipedia page about binary .

However, if an important broker like IQ Option launches a product and calls it Digital Options, we are required to update ourselves and then associate this term with the digital options offered by IQ Option, at least in this article.

You all probably know how binary options trading works. Let’s go now to discover the trading with the digital ones.

Trading with digital options, what changes

While with simple binary options you simply choose between two directions, SU or DOWN, with the digital options you choose between multiple levels .

What does this mean?

To explain it in a simple way, look at this picture:

As you can see, on the right of the graph, around the dotted line of the price, price levels appear within an ellipse (129.0800; 129.0600; etc.).

These price levels can be clicked to tell the platform that this price is deemed achievable . For example, if I think that a price can get to 129.0600, I will click on the corresponding button.

Look now what happens if I click on 129.0600.

Note well: not only is the 129.0600 button highlighted, but the percentages of profit percentages related to the UP and DOWN options also change. First they were 95% and 82% while now they are 243% and 25%. This means that if you buy the SU option you could get a profit of 243% if you reach the goal . On the contrary, by purchasing the DOWN option, you could get a profit of 25%

What are the differences in percentage profit due to?

Why, in the image we have just seen, is there so much difference in profit between the digital SU and the digital DOWN option ?

Here is the explanation.

The percentage of profit varies according to the current probability that an option reaches a certain level . The greater the risk, the greater the percentage of profit possible.

This means that even the safest binary options can be chosen, with a higher probability of success, but with lower premiums.

Buy Digital Options already IN THE MONEY

Look here.

Do you notice something? There is just a tide of difference between the percentage profit of the digital option SU and the digital option DOWN with respect to the 129.0200 level.

We simply translate what happens:

  • The price at which the asset is located is 129.049055
  • Level 129.0200 is selected
  • The possibility that the option goes below the level selected at maturity is paid 451%
  • The possibility that instead the option does not reach this level at maturity is paid 12%

What does it mean?

It means that when you are buying the option, this is already IN THE MONEY.

There is a large space all in the money.

In order not to pay, the option should suffer a sudden drop and go below the 129.0200 level.

Identify trends to reduce risks and earn more

It may seem trivial to say, because everyone knows that identifying price trends is one of the most important things to do in online trading in general.

What we need to highlight, however, is that with digital options, this topic matters a lot more .

In fact, given that there is the possibility to buy digital options that are already in In The Money , it means that you can protect the percentage of profit already in place with the support of an ongoing trend.

Open a free IQOption Demo account here

This means that if you find a trend in place, for example on the upside, the SU options of a lower level will be much safer. Profit percentages will tell you, but your analysis will tell you.

To identify the current trends , you can help with the technical analysis tools that the platform has, or act faster with your eye and common sense.

In any case, you will always be free to undertake a more aggressive trading, ie aimed at the highest profit. This will obviously be more difficult, especially for very high percentages. In fact, it will be necessary to identify trend changes and inversions.

Higher profits? By identifying trend inversions.

The more difficult the forecast is, the higher the profit achievable with the digital option will be . What are the most difficult forecasts? Those concerning the trend reversals.

But not so difficult . Here’s why:

the longer the digital options are, the less it is difficult to forecast trend reversals.

In fact, the signs that indicate a trend reversal are many. These signals can be interpreted on the basis of the technical indicators applied to the graphs in real time , which analyze the price movements in a given period and produce lines according to mathematical and statistical methods. There are various technical indicators specialized in identifying probable reversals, including the RSI indicator, also called the Relative Strong Index or Indicator of Relative Strength. Add to this the ADX.

In any case, as it may seem obvious, the best technical tools to highlight trends and try to identify possible inversions, are the trend lines, the trend lines . These are the classic lines (so nice tips!) That pass from the highs and lows of a given period.

Sell ​​digital options? When you wish

We have already anticipated this opening, this extraordinary advantage of digital options. In practice, at any time, you can sell to place a point on operations and then cash or lose what you have earned or lost up to that point.

It is not necessary to wait until the option expires . At any time you can click on “sell option”, to secure profits or to reduce losses.

As you can see from this image, although the expiration of the option has not yet arrived, passing the cursor on the small arrow created when opening the position, the profit resulting from the sale of the option purchased is indicated. Just click on it to sell it and collect the profit . Likewise, losses can be stopped, in case the price keeps going against its forecast.

Not bad, right?

This feature allows you to enjoy greater flexibility in managing the result .

Conclusion

We have seen how digital options work and what are their main advantages . The differences between digital options and binary options are few, but they are still significant. The possibility to choose one’s own objective and set in this way the percentage of profit and the return of the percentage of risk, represents an innovative aspect, which we are sure will like to binary options traders from all over the world.

Open a free IQOption Demo account here

As we said at the beginning, we reiterate that the maximum percentage profit with the trading of digital options is 900% . This means that you can not go beyond this limit. This is a very high limit, for example, to earn € 900 with € 100 is anything but limited, but it is still a limit. This limit, for example, is not with classic options.

Note: classic options are not classic binary options!

The classic options, which we have discussed in several articles, represent options with which the profit is proportional to the performance of the asset price and have no limits. Obviously, achieving 900% profit is certainly difficult.

Therefore we can conclude that the digital options for us currently represent the type of option with which you are more likely to be highly profitable and certainly more flexible in all operational choices .

Always remember the other side of the profit coin. You can make profit but also lose. In any case, as you know, the losses for the options are always limited to the single transaction, ie the cost of the option purchased .

Lesson 16 – Breakdown Strategy for Binary Options

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breakdown strategy binary options

In this lesson we will offer a first introduction to the breakdown strategy for binary options , ie the so-called break-out, adapted as much as possible to the binary options model. We call it an introduction because it is a simple explanation for beginners. We will see what a break is and how it can be exploited to negotiate. Breakpoints are a great way to capture fast market movements and can produce big profits for binary options traders.

What is the break for binary options?

Breakpoints for binary options are a great way to trade on the market. Break outs can be really easy to spot , but they usually arrive with specific targets and can be found in any type of time frame . The thing to remember is that there are different types of breakouts in the market because all kinds of indicators or strategies could theoretically produce something that can generally be called “break”.

To simplify the matter, let’s start first of all by defining the term “breaking”, then seeing later how to identify it in the different time frames. We will also see how to use specific tools and then move according to a strategy.

Well, let’s go. A breakout , break out or break occurs when the price of an asset breaks down or better “breaks” the support or resistance line. The support line is at the bottom, while the resistance line is at the top.

Breakages can occur in any type of market, in any time frame and once identified they can produce fairly reliable objectives (in practice, good signals ), as well as reliable deadlines for trading with binary options (the reason we highlighted “Binary options” in the title!).

Breakages can be defined by a wide variety of technical indicators such as graphic patterns, support and resistance lines, trend lines, oscillators and other tools. The key is to identify an area where price movements can be understood.

A very effective and used example is that of the steam engine. When the steam is contained within the dimensions of the boiler, this produces pressure. Once released allows the engine to move. A breaking strategy is based on the same idea. When the price movement is contained within a consolidated area, it will agitate within an identified interval until it breaks. It can sometimes be difficult to say which way a break will go, so the best thing to do is to wait for it to happen. Comfortable, no? We will take the break as a signal. When a break is confirmed, you can make predictions based on the excess of the previous consolidation pattern.

Types of breakages

Other types of binary options break strategies include Bollinger bands and other tools. These types of analysis provide price levels that breakages can break.
In any case, every type of instrument or strategy that goes to provide strong signals and potential targets.

Where to find a break

Breakages can be identified in any type of time frame, so they can have an expiration in both the short and long term. These usually happen as a result of events, news, which can affect areas of support or resistance. Once you have identified a consolidation area on the chart, take a look at the economic calendar to see if there are scheduled news items, such as statements by influential figures or scheduled publications in the macroeconomic data calendar. Identify the events that can affect your trade.

The next step is more difficult, as you have to wait for the event to occur to see how prices move. If prices break resistance, you could buy call options , while if prices break down support, you could buy put options .

Go to Lesson 17 – Digital Options Trading

Lesson 15 – Choosing the Expiry of Binary Options

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expiry binary options

The binary options have an expiration predetermined that the trader chooses from among those available. It can start from 30 seconds and can be 1 minute, 2, 3, 5, 10, 15, 30 minutes etc. The variety of deadlines available will depend on the broker with which you will negotiate. In this lesson, however, we will focus on the motivations that must lead us to choose a deadlineinstead of another, a step that is far more important than we think.

Let’s take an example. Stop the time and answer in 5 seconds. If we now put at your disposal 100 euros for a trade, what time would you set? It would probably not be a problem to choose, because we would put the money on them, but when it comes to their money, the choice becomes important and must be careful.

The choice of the deadline can have a big impact on the success of a trade!

The binary options trading is very simple since the operations to do to negotiate are few and easy to implement. What remains are the choices, ie the values ​​to be set: type of instrument, amount, direction and … expiry. It is true that all these factors have their importance, but in this lesson we will focus on the deadline because it is the one that is usually considered the least important. In this lesson you will understand that it is not a secondary element at all. If the most important factor of a trade with binary options is the direction (up or down), the second is the deadline.
If you have already traded with binary options you know how frustrating it can be to see the title on which you made the prediction follow the direction indicated but then change right in the last part. Well, at that moment we would have liked to negotiate on a shorter deadline. The same can be said for a long deadline, in the opposite case.

Items to consider to choose the expiration of binary options

Temporal Arch or Time Frame

Now let’s start by understanding which elements to consider when choosing a deadline. The time frame is the most important. The time frame refers to the length of the chart or the trading perspective. The longer the time frame, the longer the expiration. We like to use three different time frames in our analysis: weekly charts, daily charts, timetables.

Each of these time frames presents its own signals, each of which is influenced by news and other factors in a different way. For example, if you need 2-4 bars per signal to produce a market move, then we need a deadline that is long enough for our chart.

Every signal obtained from the weekly price chart needs at least a week if not a month of expiry. This is because it may take a week or more for the signal to turn into an effective market price.

If we take into consideration the daily price chart, the deadline varies from a few days to a week, even if sometimes it can happen to wait more weeks.

If we take into consideration hourly prices, the deadline must be from one hour to a few hours, with the maximum limit being the end of the day.
So, ultimately, the longer the time frame will be, the longer the expiration will have to be.

Factors of technical and fundamental analysis

There are other factors, referring to the technical analysis, that have a significant influence on the choice of the expiry of binary options. Among these, the levels of support and resistance , the convergences / divergences (for the part of technical analysis), the news (for the part of fundamental analysis).

Support and resistance levels are a proven technique for researching areas where the market can stop temporarily or permanently, or reverse. If an asset is traded very close to the support or resistance line, there can be significant consequences. For example, if an asset is rising on the daily chart and a strong stochastic signal is received, we may have problems. Usually a one-week deadline could easily be enough for this trade, but if its price is less than 1% under the long-term resistance, things will change. The asset moves but is stopped at the resistance for over a week while the market consolidates and therefore this continues to rise. There may therefore be delays in your journey, if we find support or resistance lines. Slows or, in the worst case, inversions that affect to such an extent as to make us lose the forecast.

In general, we can say with certainty that the daily and weekly charts make much more sense and work much more than the hourly ones.

Convergences and divergences

The convergences and divergences may occur in any period of time and even on multiple timeframes. A convergence occurs when a price action, two or more indicators, or two time frames are in agreement and produce the same signal at the same time. This is a very strong signal, well above that formed by a single indicator or time frame.

A divergence, on the other hand, occurs when a price action to the indicators is not in agreement. The divergences are often used by countertrend traders as a trade signal opposed to the underlying trend.

When convergence is found, a shorter expiration can be used because the signal is very strong and its probability that it is effective soon is high.

When a difference is found, however, it is better to be cautious and for the less experienced it is advisable not to negotiate.

Financial and General News

The news may have significant influence on the market, especially in certain cases, such as the publication of macroeconomic data or other events. However, there are many traders who do not recommend taking care of news, as sometimes the market behaves in the opposite direction to what it should do after a certain news. This choice will depend on you, which will also be based on the type of news and the type of impact it can have on a given market. Keep in mind that you can see speculative sales movements to reduce a price of an asset and then wait for it to go up again. The advice we give you is to take care of the news that can actually affect your trade.

Measure the graphs

We conclude this lesson with a great advice, that of learning to measure rallies, pullbacks and corrections in the graphs, or increases, using also tools like averages and others. Getting familiar with the graphs is like taking the measurements of your car to make perfect parking spaces, to the millimeter. For example, if a signal averages 10.6 days on the price for a given security and for a possible market, we will use this average to make a prediction on how many days we will have to wait before opening a position.
Another suggestion is to concentrate on 2 or maximum 3 assets and study them for good, keeping in mind everything we talked about in this article.

Go to Lesson 16 – Breakdown Strategy for Binary Options

Lesson 14 – Books for Binary Options Trading

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books binary options

A great tip to all fans of trading with binary options , especially at the beginning, is to buy some books for binary options trading . Of course, not just one, but someone. In fact, the authors can always have some way of seeing subjective on some points, so it would be really interesting to understand this topic from different points of view. In addition, the charm of paper, much more relaxing than a monitor on: a book can turn into a precious friend when we are relaxing on our bed. There are also many ebooks made available, subject to free registration on this free platform ideal to practice with binary options

The best books for binary options trading , those that do “in our case” are not very easy to find. First because there are many, especially online, depending on why you need to make a skimming to choose the high quality ones. Well, here you will find some of the best books on binary options, which we have personally read and analyzed, judging them above the average books that can be found in the ebook, to which we will dedicate a few lines but love towards the end of the article.

Our book on favorite binary options

Among the various books we have read, certainly our favorite is ” Reminescences of a Stock Market Operator “, that is, Memories of an Equity Market Operator. The reasons are mainly two: the first is that it contains many important information important for all traders; the second is that it is a truly wonderful reading. In fact, it is the story of Jesse Livermore, the biggest trader of all time. Jesse was so good and successful that he became so famous that he could move the market with a simple comment (it was a so-called “market mover” analyst.) For this same reason, Jesse was accused of being among the causes of the market crisis. That’s exactly it: we’re talking about the 1920s, so the book is full of history.

It ‘s nice to highlight how you can make a transition in time from the’ 20s to the internet, where you can trade binary options with just a click of the mouse. This shows that some of the principles of trading with options are the same that underlie traditional trading, indeed, in the history of trading.

Jesse began trading in a bucket shop in the late 1800s in New York. A bucket shop was a place where anyone could enter and bet on the market. These bets were very similar to today’s binary options : if the asset went up, the trader won; if the asset went down, the trader lost everything .

During the years of trading at the bicket shop, Jesse casì could have predicted market movements and future prices based on the current price action. He applied his theories until he perfected them and began to operate on the real stock market. From that moment on, his true educational moment begins.

This book is a piece of history but above all contains a lot of principles that every trader should make his own. Every time you read, you learn something new. Each page gives us a lesson.

A more recent book

All right, back in the ’20s has kept us a bit’ suspended, a little ‘dreamy. Now let’s go back to our days and talk about another great book on binary options: Technical Analysis Explained , or “Principles of Technical Analysis”. This book should be the starting point for every new trader and the constant reference point for everyone else. The author is a Martin Prings , and the book is the perfect introduction to technical analysis.
The book begins with price action and the Dow theory, which explains how markets move. Continue by defining the technical analysis and all the ways in which traders can use it in the period in which they live, whatever it is. Explain the different types of graph, starting from the points to the most complex. Obviously it explains all the theory behind trends, supports and resistance, oscillators and other technical indicators.

The second half of the book is dedicated to trading theories, which obviously capture the most attention. The author shows how to apply all the analyzes explained in the first part of the book and how to profit from them. What do you say, caught your interest?

Books to avoid

If we look for “binary options ebook” or “binary options ebook” on the internet, we will find thousands of results. Many have written a booklet grouping a lot of information just to advertise or advertise their site. The problem is that many of these books stop at the basics, another problem is that they are almost all the same, others may be the transcription of someone who sells his own methods for magical and infallible (therefore dangerous), others who fiddle here and there without have at least a few years of experience behind. In short, there is a lot of rubbish. For this reason, we apologize for the authors of ebook authors, the book on paper binary options is more likely to be of quality, especially if the author is (highly) appreciated in his field.

Knowledge is strength

We have always said that in several of our articles, information and updating are two fundamental points in the experience of a trader. The numbers are not enough, it is also necessary to deepen the theory, know how to chew, know how to interpret and reinterpret. Successful traders are usually those who use their studio adapting it to their own style, thus creating a “war” machine that can be adapted to any type of situation, to any type of territory, or to any type of market in any conditions you are here. Once this level is reached, it will be possible to analyze the historical data, the current data, the fundamental and technical contexts in order to be able to set up one’s day to day operations.

When you read a book about binary options, do not rush to put into practice what you are reading for the first time. At most, limit yourself to using current data as a real example of what we will study in the book. Try drawing some graphs, or read the current graphs based on the information you will get from the book. The first step, the purchase of the book and then the deepening, you have already done it. Now keep it up, with patience and coldness.

Read as Risk Management

book on binary options trading can also turn into a shield, in a tool that will teach you how to defend yourself against risks, a tool from which you will learn what operations you do not do during your trading activity. It will prevent you from agitated sleep, stress and loss. A book is one of the best investments you can make in the field of trading. Little but sure.

Go to lesson 15 – Choose the expiration of binary options

Lesson 13 – Risk Management for Binary Options

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risk management binary options

In this lesson we will offer an important overview of risk management for binary options , which will help you optimize your trades and reduce risk based on your style and your goals. In binary options tradingwe define risk as the probability of failure of our operations and therefore the possibility of incurring losses. It should be underlined that unlike other derivative instruments, with binary options the risk is limited to that of each individual transaction: if for a trade I invest 20 euros, the risk for that trade will be a maximum of 20 euros. The difference immediately arises with trading in CFDs, where the loss affects the capital available on the trading account. It is good to clarify right away that there is no trading method that is 100% safe from losses, so always be wary of “infallible” methods.

It is also always important to start by knowing what the risk potential of a certain operation is, which we will try to understand before opening a new position. In this way, we will always know what will be the worst scenario that can happen to us, the maximum loss we can have with a given trade. This loss ceiling is also called “risk tolerance”.

Different styles, different rules

The rules for risk management are not the same for everyone, because each of us has his own style of trading (for example, it changes a lot if you are a defensive trader or an aggressive trader). Likewise, each of us will have his own style of risk management. What we can do today is to advise you to create your own risk management plan, which not everyone does.

Common methods for traditional trading and binary options

In trading with binary options very often very fast operations are chosen, from a few minutes. We can not therefore use the anti-risk methodologies of traditional trading with CFDs , in which two excellent risk defense systems are very popular. Hedging and stop loss.

A very common method to manage one’s own risk and defend oneself, universally used by all traditional traders, is hedging , that is, a hedging strategy that freezes a certain situation by acquiring symmetrically opposite to the open and losing position.

Another method of reducing risk is the stop loss , which is the setting that commands the platform to close a position once a personally-set loss level has been reached.

Risk Management for binary options

In trading with binary options, the situation is very different, since the stop loss is not available, and hedging would not solve much because the profit is a fixed percentage, not proportional to the results.

Many of the risk management techniques with binary options focus on initial capital and on technical and fundamental analysis for the time of entry.

With regard to the first point, capital , the aim is to maintain quantities of manageable trade with adequate budgets. If you are an aggressive trader and you like to risk a lot, we advise you to open positions for up to 5% of your capital at a time. This means that if you have 10,000 euros in the trading account, the potential losses on all open positions at any given time should never exceed 500 euros. In the same way, if you have a thousand, they should not exceed 50 euros. Traders with more experience, however, use this method but with higher percentages. Most of the responsible traders, however, do not go beyond 2-3%.

Regarding the second point, the analysis is up to you, based on the financial news that come for the title on which you want to negotiate. News influences titles differently, depending on the market they belong to and based on the context in which it takes place.

Buy low and resell high

In the management of risk in binary options you will always have a great responsibility: that of choosing what to trade on. If we think of the saying “buy low and resell high”, we can learn many things.

Let’s reread this saying in binary options key then replace “buy” with “buy options CALL” and “resell” with “buy PUT options”. When we buy CALL options at a very low price (close to the support), it is less likely that they will fall again. So, in this case we can say that there is less risk for opening up positions. The same applies to the opposite situation. If a price will have reached very high levels compared to usual (or close to resistance), there will be less risk in opening downward positions, ie in the purchase of PUT options.

This risk management strategy clashes with the concept of breakdown. There are situations in which certain levels of support or resistance are “broken” and therefore the price actually goes beyond the “low” or “high” that we take as a reference limit. However, break strategies are successful only 30% of the time, so your total risk for losses can be reduced when we avoid these strategies and use the usual market logic to buy low and resell high.

Roll Over and Early Closures

Some brokers offer the possibility to manage their positions in a more flexible way. For example, a risk management tool in order to reduce it we can have it rolled over , or better with the ” roll over for binary options ” tool . This allows the trader to postpone the expiration of his trade. That’s right: postpone the expiration of your trade! For traders who are going in the wrong direction, in this way there is still potential for success, and therefore the possibility of reducing the risk of loss.

One function to consider is that of early closure . Its operation is practically the opposite of the rollover: it allows to anticipate the expiration of a trade. In this way, when we find this mode available, we can close the trade before it expires and cut potential losses. This function can be called with names other than brokers, so when you choose a broker, try to see if it is available under the name of Early Exit, early closing or something like that.

Go to lesson 14 – Books for binary options trading

Lesson 12 – 5 Instruments and Indicators for Beginners

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binary options instruments

In trading there are numerous tools that can be used. Not all are good and not all are suitable for different types of traders. For example, some are excellent indicators for beginners, but others are only suitable for experts. In this lesson we list the best strategies and best indicators recommended for beginners binary options traders.
Our selection is based on experience , because when you start you need to overcome a nebulous barrier composed of all those who want to propose rapid profit methods, miraculous methods, infallible methods and so on. What we offer you instead is simply this: study the right things, learn , experience.
In trading it is important to analyze data and graphs in order to identify trends and make predictions . And here are the essential tools that a beginner of the trading should know to menadito:

  • Japanese candles
  • Fibonacci
  • MACD
  • TSF
  • Strength Indicator

Japanese candles

Most likely you will already have seen charts with green bars and red bars. Well, those are the so-called ” Japanese candles ” or “candlesticks”. These represent the best way for traders to view financial charts. The system is hundreds of years old and will last for a long time in the future. Their strength is based on the fact that Japanese candles offer a practical and fast way to display price information.
Each candle brings the color of the movement that characterizes it: the candles see indicate a rise, the red candles a downward. The length of the candle is based on the duration of the movement in a given direction.
So, to summarize, let’s take a practical example:

  • An upward movement opens a green candle
  • A subsequent downward movement closes the green candle and opens a red candle until there is another upward movement

Studying the graphs through candlesticks is much simpler, more professional and effective than line graphs, that is characterized by continuous lines that pass from the various points of price quotation.

Fibonacci

You probably already heard about Fibonacci, especially if you remember a little math or the movie “The Da Vinci Code”. Fibonacci was a mathematician who discovered that nature was regulated by a set of simple relationships. He discovered these relationships everywhere and in everything. Today, Fibonacci numbers are used in many ways to measure markets. The simplest and most useful for new traders is that used by the QuickFib retracement tool. This tool is able to “read” a market using the Fibonacci series logic and it provides really good support and resistance forecasts (prices that are not able to “break through”, downwards or upwards). The QuickFib tool will be able to confirm the lines of support and resistance that you will create yourself (without too many difficulties!).

MACD and Momentum

The acronym MACD stands for Moving Average Convergence Divergence Tool. The Momentum is one of the basic principles of the technical analysis of trading. MACD is one of the best tools and one of the most used for momentum measurement. The tools use 2 moving averages and measure the distance between them. When two averages move close together they say they are converging, and when they move away, they are said to be divergent. This convergence / divergence is shown in two different ways: the oscillator and the histogram. Both instruments are useful and effectively measure the market momentum, identifying supports / resistances and providing entry signals (times in which to open trading positions).

TSF – Time is important

TSF stands for Time Series Forecast , also known as TSF. It is the apex of a study on a really complicated regression line. The good news is that this indicator is very simple to use and provides a clear signal for short-term trading. The other good news is that when it combines with other tools such as the ones we talk about in this article, its results further improve: it becomes even more effective. The TSF uses multiple linear regressions, an instrument that predicts possible future movements, and provides a sort of moving average for these predictions. In an upward trend, the signal is given by an intersection above. In a decline, an iteration below.

Strength Indicator – The strength of market movement

The strength indicator is an oscillator created by Alexander Elder, author of a book on commodity trading titled “Trading for a Living”. The strength index is another type of “momentum” indicator, but based on direction, amplitude of movement and volume. Although widely used, this indicator can lead to some ambiguous situation as it provides different types of signals. The strength index analysis can help determine support and resistance levels, reverse pin point areas, as well as providing good trend signals to follow.

Go to lesson 13 – Risk Management for Binary Options

Lesson 11 – Options Earnings and Rebates

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earnnings binary

In this article we will focus on two very pragmatic aspects, addressing the argument of gains and reimbursements of binary options . When one thinks of options, in fact, one thinks only of the possibility of winning or losing according to one’s prediction. Instead, with the binary options you can also get reimbursements, in case they expire “At the money”. If you do not know what it means, do not worry, because you are about to find out.

What results does options trading bring?

The results of binary options trading can be divided into three categories:

In the Money (ITM): that is, with a positive result that leads to a gain with a net profit of approximately 70% of the amount invested
Out of the Money (OTM): ie with a negative result that leads to the loss of the amount invested
At the Money (ATM): neither positive nor negative result leading to a refund of the amount invested

Case of In the Money Options
If at the expiration of the selected binary options ends “In the Money”, the user earns an amount equal to the amount invested plus a fixed percentage profit or predetermined by about 70%. If you invest € 100 you would get another 70 for a total of € 170.

But when do the binary options expire in the money? Here is the list of the various possible hypotheses:

Options High: we end ITM if we focus on “High” and the market price at maturity is higher than the target price
Options Low: we end ITM if we focus on “Low” and the market price at maturity is lower than the target price
Options Touch: we end ITM when the market price reaches the target share before the deadline. The objective can therefore be reached at any time.
Options Do not Touch: we end ITM only if we reach the deadline, preventing the market price from touching that target.
Internal Interval Options: let’s go to ITM if the market price is within the range at maturity.
External Range Options: Let’s go In The Money if the market price is outside the range at maturity.
Options that Expire Out of the Money
Now we see the hypothesis in which we end up Out of the Money and then we lose as much as invested in the single operation of reference:

Options High: we finish OTM if we focus on “High” and the market price at maturity is lower than the target price
Options Low: we finish OTM if we focus on “Low” and the market price at maturity is higher than the target price
Options Touch: we finish OTM in the moment if the market price does not reach the target share before the deadline.
Options Not Touch: we finish OTM if before the expiry the market price touches that objective
Internal Interval Options: we go OTM if at the expiry the market price is outside the interval.
External Range Options: We go out of the money if the market price is within the range at maturity.

Options that expire At the Money
In the introduction we presented the possibility of obtaining reimbursements . Well in trading with binary options you get repayments when you end At the Money , or you arrive at the deadline with a price situation “at the limit”.
In case one of the following hypotheses occurs, you will get a 100% refund:

Choose options High and the market price at expiration falls equal to the target price
Choose Low options and the market price at maturity is equal to the target price
Choose Binary Options Range and the market price at maturity falls to the lower or upper limit

Go to the next lesson – 5 Instruments and Indicators for Beginners

Lesson 10a – Binary Options Range: Practice

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binary option range example

The binary options range are characterized by the ability to predict if the price of a given asset will close in due range within a given range or outside. By interval we mean a value between a low and a high value, so we can have for example a range between 1,300 and 1,302. If we consider the value of the EUR / USD, which is currently close to this quota, we will have options that allow us to predict whether by a certain date the EUR / USD will be between these two values.

To simplify the explanation and make it easier to understand, let’s give an example by providing a binary options trading platform and “taking” some screenshots.

Here is the initial screen that we will find opening the 24option options trading platform.

First of all, we open the binary options trading platform, in which we can easily see that there are different types of instruments available, including the binary options range. We click on the specific button and continue.

As you can see, among the range options there are several selectable, each with different assets, including the EUR / USD currency pair that we used as an example in our introduction to the topic. To continue our operation with this asset, just click on the bar associated with it.

Once this is done, a real-time graph will be shown on the right with the current listing of the same asset. In this case, the EUR / USD listing. In addition to the graph, we can choose whether to bet on “In” or “Outside”, or we can predict whether the quote at maturity is within the interval (In) or outside (Outside). In this case we chose “Outside” as you can see from the highlighted button

In addition to the “In” or “Outside” position, you can choose the amount you want to invest in this operation yourself. When you have decided on the amount, you will know from the beginning how much you can win if the operation is successful. In this case, we propose again the second figure, in which the table shows that the profit on the transaction is equal to 70%. In practice, if you invest 100 € you can collect 170 gross if you win. If you lose, you will lose 100.

In the figure above you can view: asset (EUR / USD), profit percentage (70%), target price (interval margins), expiration time and time available to buy binary options associated with that deadline. In this case, if you want to buy binary options with a maturity of 16, you must do it within 1 minute and 22 seconds. If you are late, you can buy binary options for the next deadline (eg 16.30).

As you can see, in this screen there are four currency pairs and an “ILO”. The latter refers to the raw material, as with the binary options you can trade options on currencies but not only. The other assets include commodities (commodities), indices and shares.

Go to lesson 11 – Earnings and reimbursements of binary options

Lesson 10 – Binary Options Range

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BINARY OPTIONS RANGE

The binary options Interval bear this name because unlike the “High Low” you do not predict a direction, but a range in which you could stop the price once the deadline has come. As for the other binary options, also the options Range or “Range” have a certain expiration date, and even in this case, it is predetermined. The elements to be considered for trading on Range options are therefore the expiration and the range. Let’s see these two elements in detail, so you can negotiate them, if the broker options used present in their range of products available.

The deadline

For the binary options range the expiration is definitely experienced with less frenzy than what happens with the other binary options, because usually if the price is halfway through the range, this can be framed “in the money” already in advance. For this reason, it can also allow other decisions to be taken regarding the start of a further position, exploiting a probable “flat” moment. Yes, because if the prices stabilize, this situation can be fully exploited by continuing with the same strategyfor a later option. The disadvantage is that, however, these are binary options that do not have a very short term maturity, so the trend may change over a longer period of time. The ideal would be to have binary options, but range from max 60 seconds.

The Range

Now we come to the main aspect of the binary options Interval, which is the range . The range (literally “interval”) is given by two quotas, a minimum and a maximum, within which the quotation must remain in order to arrive “in the money”. For example, if for binary options X the range is between 2.3 and 2.8 the trader to finish “In the money” should expire with a quote included in this range (minimum and maximum included). In the case, however, ends up out of range, the trader can be considered “Out of the money” and therefore lose the amount invested in the single operation.

When to use the Range

If you learn how to read candlesticks, you will be able to discover the moments in which there is indecision, ie there are no particular upward or downward movements. This is the ideal situation to negotiate with Binary Options Interval, as there is more chance that these take a direction and follow it, making us end up out of the money. For this reason we refer you to the next practical lessons with binary options and the strategies presented in them.

Go to Lesson 10a – Options Range in Practice