Oil Trading Binary Options Strategy

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  • Binarium
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    Best Binary Options Broker!
    Perfect Choice For Beginners and Middle-Level Traders!
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  • Binomo
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Binary Options Trading Strategy – Best 60-Seconds Strategies

Today we are going to share our binary options trading strategy with you. This strategy is designed to help you identify whether you’ll like trading binaries and teach you how to trade binary options the right way. If you prefer to play it safe over gambling, you’ll need a strategy or tactic to help you master binary options and other trading activities. This is where our TSG team comes to the rescue. We will provide you with the best binary options strategy.

The main reason we’re interested in learning about trade binary options is the fact that binaries simplify what we’re already doing in Forex. At the same time, binary options also allow us to make more money in the process. We are also controlling the risk.

Binary options are easy to understand. This is coming from someone who has little or no experience in the area. If your favorite approach to trading forex is to jump in on a fast price movement and ride the intraday trend for as long as the momentum lasts, you can learn how to make money trading binary options very quickly.

When we first discovered binaries, the light bulb in our heads turned on. We figured out the same thing that we’ve been doing in Forex can be done. But walk away with 75%, even 95% winning trades because we only needed to get the direction right. No need to worry about how many pips we could grasp in the process.

And that, my friends, is the real beauty of binary options.

What are Binary Options?

Binary options are a form of derivatives that have a fixed profit or loss. Trading binary options is simple. All you need to do is ask yourself a simple yes or no question. Will the price of the underlying asset be worth more than the strike price at the expiration date?

Now, let’s start by understanding how binary options work.

Essentially, we can trade binary options for any type of instrument. Whether it be commodities (Gold, Oil or Silver), Forex exchange currencies (EUR/USD, GBP/USD or USD/JPY), or stocks (Amazon, Tesla or Twitter).

So, the first thing you need to decide upon is to select the asset to trade.

Second, before submitting our trades, each of these instruments has a current value at any given point in time. How to trade binary options depends on our trading skills. It is used to predict where the current value will be some time in the future. In other words, we must use our skills to predict the market direction. This will determine our success in trading binary options.

The market can only go up or down. If we believe the current value will go up in the near future, then we buy a Call option. On the other hand, if we believe the current value will go down in the near future, we buy a Put option. Read more about call options vs put options.

Third, we need to determine what the most critical aspect of trading binary options is. The expiration time will ultimately determine if you’re making a profit or not.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker!
    Perfect Choice For Beginners and Middle-Level Traders!
    Free Demo Account! Free Education!

  • Binomo
    Binomo

    Honest broker!

Trading binary options require you to correctly forecast two things:

  1. Whether the market will rise or fall.
  2. Your forecast needs to be accurate during a certain time frame – called the expiration time.

If you’re right on the market direction by the time of the expiration time, you earn a profit. Being wrong means you incur a loss. The way binary options works is that if you’re right on the market direction, you’ll get a percentage of what you initially invested in.

Typically between 75% and 95% and in some cases, even 100% of your initial investment, depending on your Binary Options Broker.

Supposing we’re wrong on the trade, then we’re going to lose the whole amount invested in the short term.

We have made a nice infographic that highlights the four steps on how to master binary options trading.

Now we’re going to focus on step two, which is how to predict the price movement. If you manage to figure this out, then knowing how to make money trading binary options will be a piece of cake for you.

Now, before we’ll outline a method on how to make money trading binary options, we always recommend taking a piece of paper and a pen and take notes on the rules of the best binary options strategy.

In this demonstration, we’re going to look at the buying Calls.

The Best Binary Options Strategy

Our team at Trading Strategy Guides is ready to share with our beloved trading community our 60-second binary options strategy. We don’t just hope this strategy will make you money, we’re certain it will. The mathematical model behind this binary options trading strategy has a proven market edge.

The only tool you need to trade binary options successfully is the RSI indicator.

Even the RSI indicator is not good enough if it doesn’t have the “right” settings. The RSI default settings need a little bit of adjustment if you want to master the 1 minute time frame. We use a 3-period RSI to trade binary options profitably.

Naturally, a lower RSI period means that the indicator will tend to be noisier than normal. But it is more responsive to the immediate price action. Along with the RSI settings adjustments, we also played around with the overbought and oversold readings. We found out that by using an 80 RSI reading for overbought and 20 RSI reading for oversold condition, we get more accurate day trading signals.

*Note: Make sure you adjust the RSI settings before you jump into the binary options trading strategy.

By changing the RSI overbought and oversold line, we have eliminated the noise. So now we’re ready to highlight our binary options step-by-step guide:

Step #1: Find an instrument that is showing a low the last 50 candlesticks. Use the 60-second chart (1 Minute TF)

The 1-minute binary options or the 60-seconds time frame is the best chart for trading binary options. In other words, the best binary options expiration time is the 60 seconds time frame.

We recommend highlighting the starting point on your charts. And the ending point of your 50-candle low that you have identified. Simply draw two vertical lines on your chart through the starting point and ending point of your 50 candle low.

When you count the 50 candle low, you should always start from the current candle. Then go from the right side of your chart to the left side of your chart. If you manage to count 50 candle low, obviously the starting candle point will be your 50 candle low.

Moving forward, it’s time to put the RSI indicator in use and spot if we have extreme oversold reading or not.

Step #2: At the moment the 50 candle low develops, we need an RSI reading of 20 or below

Since this is a reversal trading strategy we need the RSI indicator to show a bullish reversal signal. An RSI reading below 20 shows that the market is in oversold territory and it can potentially reverse.

In our example below, the 1-minute EUR/USD chart is satisfying the two conditions.

Keep in mind that in order to move to the next step, we need the 50 candle low. We also need an RSI reading below 20 to happen at the same time.

We added one more factor of confluence that needs to be satisfied. If used in conjunction with the previous two conditions, it will make you a money maker binary options trader.

Step #3: Look for a bullish divergence to develop between the RSI indicator and the price.

When trading reversals, you need to be as precise as possible. The more confluence factors you have in your favor the more accurate the reversal signal is.

What we need to see here is for the price to continue moving lower after the 50 candle low was identified. At the same time, we need the RSI indicator to move higher in the opposite direction.

If the price moves in one direction and the momentum indicator moves in the opposite direction, it means they are diverging from each other. This signals a potential reversal signal.

Now it’s time to highlight how to find the right entry point for the binary options trading strategy.

Step #4: Buy a Call Option after the first candle that closes above the high of the 50 candle low

The first thing you need to do is to mark on your chart the high of the 50 candles low with a horizontal line. The first candlestick formation that breaks above this high is your trade entry signal to buy a 60-second Call option.

It’s that simple!

After you decide the amount to invest and pick the 60-seconds as your expiration time, it’s time to sit back and wait 1 minute before hopefully collecting your profits.

Step #5: You collect your profits if the next candle closes higher than your trigger candle

If at the expiration time, the price is higher than the price you opened your Call binary options, you’re lucky because you’re about to check-in a big payout.

For example, if you’ve invested $1,000 and your binary options broker offers you an 85% payout, it means that you accurately predicted the outcome of a trade. You get back your initial investment of $1,000 plus the 85% payout which in our case is $850 in profits.

If you want to buy Put binary options, use the same binary options guide, but in reverse.

Conclusion – Binary Options Trading Strategy

Before learning how to make money trading binary options you need a great Binary Options broker. You can’t start hitting home runs right out the gate without making sure you have a binary options broker who wants you to succeed. Secondly, you need a strategy based trading technique to reveal the market direction. You only need to forecast if the price will be up or down during the next 60 seconds, making it very convenient.

We use a heuristic approach to speculate on which way the price is going to move during the next 60 seconds. At the end of the day, traders are looking for a reliable binary options system that will help them make money from trading.

The good news is that the best binary options strategy is exactly that system. Our team is built of many traders with experience in the industry, including binary options traders who know how to make winning trades. We’re ready to help you with every step of the way.

Thank you for reading!

Also, please give this strategy a 5 star if you enjoyed it!

Don’t forget to read our guide on regular options trading for beginners here.

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Binary Trading Strategy for Oil

Trading Oil on Binary Options Platforms

This article is sponsored by OptionBit which is our recommended broker for trading oil with binary options.

It is true that this is a binary options trading blog, but the truth is that the principles we shall talk about cover all assets traded in the binary options market. So we will select an instrument that is traded on the binary options platforms of many brokers to illustrate a typical trade strategy, and that asset is crude oil.

Many traders are familiar with trading currencies, but very few trade crude oil. As such, they are in a position where they are leaving a lot of money on the table. This is supported by the fact that the same technical analysis principles used in forex analysis are virtually the same principles used in technical analysis of any other instrument. What is good for the goose definitely has to be good for the gander as well.

Let us examin a binary options trading strategy that will employ the use of the Fibonacci retracement tool, this time not as a strict retracement tool but as a tool that can be used for range trading.

Look at this daily chart for crude oil (CLJ1). This was the chart occurring at the time when the Libyan civil war was raging and crude oil prices had really taken off from $84 to slightly above $100 a barrel.

This kind of trade is a dicey one, because the fundamentals that were pushing crude prices were ones that could not be predicted. This was a war situation. Any shift in the dynamics of the war would immediately cause a shift in the behaviour of the underlying asset. This was what was playing out here.

Prices were rising as no one knew how long the war would last. As battles for the Libyan cities raged and towns were taken, lost and re-taken by the opposing fighters, prices were doing a dance.

In this sort of scenario, it is extremely important to pay attention not just to the fundamentals, but to the technicals as well. You may have heard the saying: trigger fundamentally, enter technically. What this saying means is that the triggers for direction are the fundamentals (the news), while technical plays enable the trader to make the correct entry in the direction of the fundamental trigger.

As it became obvious that the war was going to last for sometime as talks and mediatory efforts broke down, traders settled in for a long ride upwards. But this is where the technicals came to play.

Scenario 1

In the chart below, we see a double bottom forming at the commencement of the civil war, giving crude a bullish jumpstart. Combining the news and the double bottom formation, a discerning trader would know that the only way crude oil was going was northwards. This sets up the following binary option plays:

1) Touch option with an upside barrier above the neckline level of $92.40.

2) No Touch option with a downside barrier below the double bottoms at $84.80.

3) “High” trade (or “Rise” on Betonmarkets), betting on prices staying above the neckline of 92.40.

4) “Out” boundary trade using the price barriers of the neckline as upper barrier, and the double bottoms as lower boundary.

This trade outcome would have netted the trader at least 400% returns with a one-week expiry.

Scenario 2

For those who missed the play on scenario 1, the next play would be to wait for the retracement that would surely occur as traders took profits. Plotting the Fibonacci retracement tool from the swing low to swing high, we see this at the 39.2% retracement line, somewhere at 97.40. Of the two green circles, the second one is the most significant. This is because the first indicates the point of maximum retracement, which forms a key support. It tells the trader that any other retracements would probably test that support level as well. This sets up the following trades:

1) Touch trade, setting the 39.2% retracement line (or more ideally a point between 10 and 20 pips above it) as the strike price.

2) No Touch trade at a point 10 pips below the 50% retracement line (valid only if the 39.2% retracement support is a strong one).

The other binary trade types would be too risky to trade in this situation so we leave them out.

Hope this short strategy lesson is well understood. We used this for crude. You can use it for any asset in the binary options market.

Sell Crude Oil Binary Options

Trade the short side while limiting risk and without using a stop loss.

The price of crude oil goes up and down in response to a variety of factors: supply and demand, political unrest, and seasonal trends. When oil prices move, other markets often move with them, including precious metals and stocks.

Most stock investors just have to ride it out when a drop in crude prices hurts their portfolios. Other traders welcome the chance to short crude oil, but not everyone wants to take on the level of risk that futures trading entails, not to mention the high account balance and margin requirements.

Nevertheless, half the movement in any market is downward, which means that much potential profit is to be found on the short side. Markets go up and down, so why shouldn’t you have the chance to profit both ways? Binary options give you a limited-risk way to learn and execute short selling in any market, including volatile markets like crude oil.

Every binary option trade has four basic steps:

  • Choose a market to trade and the time frame you want to trade
  • Choose a strike price you think the market will be above or below at expiration (or before)
  • Buy or sell for an amount you are willing to risk
  • Manage the trade until exit or expiration

The Nadex Crude Oil binary option is based on the NYMEX® Crude Oil Futures contract. For this example, let’s say it’s trading around $48.50 a barrel.

1. Choose your market and expiration

You see that crude oil has been in a downtrend for three straight days and you think it will continue. You want to sell a binary option and then either buy it back at a lower price or hold it until expiration.

In the Finder panel on the left side, you choose Commodities (Binaries) and under it, Crude Oil and Daily (2:30PM). You decide to trade a daily binary, which will expire at 2:30PM EST.

2. Strike price: your line in the sand

The basic question a binary option is based on is, will the market be above this line at this time? Since you are selling the binary option, now it’s time to choose the line you think the market will be at or below at expiration (preferably well below).

While some traders will choose their strike price from the contract list, many of you may prefer to open a chart overlay comparing the strike levels which the binary ladder charts displays. Each of strike levels have buy and sell buttons with the appropriate binary pricing to place your order right from the chart window.

Your market bias of Crude Oil is that you’re looking for a trade target of XXX by the end of the trading session which is 2:30pm ET. Assume you decide to choose the binary strike which is the closest to the current underlying crude price. Remember for the binary seller to receive the settlement payout, the expiration price can equal or be lower than the strike level.

3. Place your order

By clicking on the Sell button of the 48.50 binary strike level, an order ticket will automatically pop up. The order ticket will display the bid price but the number of contracts you wish to sell will still need input where we chose 1 contract.

Note within the order ticket will show updated live bid/ offer binary pricing. A great feature of Nadex ladder charts is that you can see the live chart along with the order ticket. In this case, we might have waited for a better price, when we saw the price ticking back upward:

If you want to enter the order at a different price level or quantity you can adjust using the up/down arrow keys within the tab space. At the bottom of the order ticket, you’ll see your maximum profit and loss (initial trade cost), associated with that binary price if you place the order. It is always a good habit to run through the check list below before placing your order.

  • Do you have the right expiration and strike price?
  • Are you buying or selling?
  • Did you enter the correct number of contracts and the price you want to pay?
  • Does your binary price reflect the profit /loss ratio you’re looking for?

After you click Place Order, the trade will either be filled right away, giving you an open position, or it will sit in the Working Orders window. Once it is filled, it will move to the Open Positions window.

Binary prices can move fast, so keep an eye on the live quotes. If they move away from your order price, you will probably not get filled right away.

Back to our example. Crude oil futures drop 20 cents in less than ten minutes. Now you have to make a decision, exit now at a profit or hold to expiration?

4. Manage your trade until exit or expiration

You decide to get out while you have a healthy profit. Sure, the market could go down further and give you the full $44.25 profit (minus $2 fee) at expiration. But it could also turn around and take back the profits it is offering you.

Taking profits early on a daily binary can also be a good strategy if you can’t watch the market all day.

Since you sold the binary option, exiting is as simple as clicking the Buy button next to your strike price on the chart. The price when you click is $40.75, a profit of $15 – 2 = $13.00 per contract. Not bad for less than 20 minutes’ work.

If the trade had gone against you, you could have limited your losses as well. Your maximum loss was predetermined: $55.75 plus $1 to enter the trade. But you could have exited with a smaller loss the same way you just took profits, with two clicks.

As you can see, we designed the Nadex Trader platform and our other platforms to support you but not get in your way. The challenging part of this trade was the part we think traders should focus on: planning your entry and exit strategy, and executing it with patience and discipline.

At no time did worry about how much you might lose, since you knew that up front. And at no time did you wonder if the pricing was reliable, or if the exchange might be taking the other side of your trade, or if your fill was really the best possible one. And finally, the platform itself didn’t get in your way.

Without those distractions, you were free to focus on the trading itself.

Experience a different way to trade.

Fill out our online application in just a few minutes. You’ll get a quick response. Once it’s approved, you can fund your account and be trading within minutes.

Or try it risk-free with a
full-featured demo account.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker!
    Perfect Choice For Beginners and Middle-Level Traders!
    Free Demo Account! Free Education!

  • Binomo
    Binomo

    Honest broker!

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