How to Trade Binary Options with Pocket Option
Those looking to get started with binary options trading often find themselves overwhelmed by the multitude of strategies discussed online. With its alluring potential profits and complex array of choices, it can be difficult to know where to begin. However, establishing a solid foundational strategy from the outset is key to avoiding common pitfalls faced by many novice traders.
This comprehensive guide provides a straightforward overview of some of the most effective approaches for binary options newcomers. Beyond detailing popular tactics like trend following and news-based trading, readers will also find tips for refinement and risk management from experienced analysts. By learning the basics of strategies well-suited for their current skills and risk tolerance, readers can start their binary options trading journey off on the right foot.
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Is binary options trading difficult?
Not necessarily, but it involves risk and requires learning. Simple strategies for beginners can be relatively easy to understand and implement.
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Do I need experience to trade binaries?
No experience is strictly necessary but it helps to learn the basics and spend time practicing before risking real money.
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Is technical or fundamental analysis better?
There is no definitive answer as both can work. Fundamental analysis examines underlying company/market factors while technical analysis focuses more on past price/volume data and patterns.
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Does Pocket Option have a copy trading service?
Yes. Traders can browse profiles of top signal providers and choose one to copy. The platform will then place replication trades in line with those of the copied trader in real-time.
How to Trade Binary Options with Pocket Option | Binary Option Strategies
Below you will find all the information.
What Is a Pocket Option Strategy?
A Pocket Option strategy is simply a set of rules that you follow when trading binary options. It will help you make better decisions about what to trade and when to trade it.
Having a well-defined strategy is one of the most important things that you can do when trading binary options. That's because it allows you to take a systematic and disciplined approach to your trading. Without a strategy, it's all too easy to get caught up in the excitement of trading and make impulsive, emotionally-driven decisions.
A good binary options strategy will help you make consistent profits from your trading. It will also help you keep your losses to a minimum. So if you're serious about making money from binary options trading, then you need to find a good strategy and stick to it.
Top Pocket Option Strategies
If you're new to binary options trading, then you might be wondering what some of the best strategies are. Here are seven of the most popular and effective strategies that you can use:
1. The Trend Following Strategy
The trend-following strategy is one of the most popular binary options strategies. It's simple to understand and easy to implement.
The idea behind this strategy is that you will trade with the trend. That means you will only make trades when the market is moving in a certain direction.
If you can correctly identify the direction of the trend, then you stand to make a lot of money from your trading. This strategy can be used on any time frame, but it's particularly effective on longer time frames such as the 4-hour or daily charts.
The Trend Following Strategy
2. Following the News
This is another popular binary options trading strategy. It's based on the idea that you will trade based on the news that comes out about a certain asset.
For example, if there is a news release about a company's earnings, then you might want to make a trade based on that information. This strategy can be used in any time frame, but it works best on shorter time frames such as the 1-hour or 30-minute charts.
One advantage of this strategy is that you don't need to have a lot of technical knowledge to trade successfully. All you need to do is keep an eye on the news and make trades based on what you think will happen.
3. Fundamental Analysis
This binary options strategy is based on the idea of fundamental analysis. That means you will trade based on the underlying factors that are affecting the price of an asset.
For example, if you think that a company's stock price is going to go up because its earnings are increasing, then you would buy that stock. This strategy can be used in any time frame, but it works best on longer time frames, such as the daily or weekly charts.
Using this strategy can help you make money even when the market is not moving. That's because you're basing your trades on strong underlying factors, not just on the short-term price movements.
4. The Hedging Strategy
The hedging strategy is based on the idea that you will trade both with and against the trend. That means you will make trades in both directions – when the market is going up and when it's going down. This can help you make money even when the market is not moving.
The hedging strategy is a bit more complex than some of the other strategies, but it can be very effective if used correctly. There's lots of information and tutorials online about how to use this strategy, so make sure you do your research before you start trading.
5. The Straddle Strategy
This is a Pocket Option strategy that seeks to make use of the volatility of the market. The trader buys both a call and put option at the same time. This way, they take advantage of market price movements in either direction.
The trade is placed when the underlying asset price is about to break out from a period of consolidation. The need for this strategy arises when there is a lot of news that is about to be released, and you do not know which direction the market will take once the news is released.
6. The Pinocchio Strategy
The Pinocchio strategy identifies “Pin” bars or candles characterized by a small body and a long wick. These formations often indicate a potential price reversal in the market, presenting an excellent opportunity for traders to capitalize on these market shifts.
The Pinocchio Strategy
7. The Strategy of Using Candlesticks
This strategy is based on using candlestick patterns to make trading decisions. It is considered to be a more advanced strategy and should only be used by those with experience in trading binary options.
There are many different candlestick patterns that can be used for this purpose. Each pattern has a specific meaning and can give traders an indication of what the market is doing.
Bullish and Bearish engulfing are among the strongest reversal patterns.
Example of bullish engulfing
Example of bearish engulfing
Which Is the Best Binary Strategy For Beginners?
As a beginner, you will obviously have very little knowledge about how the financial markets work. This is why it is important to find a strategy that is easy to understand and follow.
A trader can test strategies on a demo account in order to check which strategy suits him best without the risk of loss.
Expert Tips To Improve your Binary Trading
The key to success in binary trading is to learn as much as you can before investing any real money. There are lots of resources available online, so make sure you do your research before you start trading. In addition, here are some tips from experts that can help you improve your binary trading:
1. Have a Trading Plan
This may seem obvious, but many traders enter the market without any clear idea of what they want to achieve. Having a trading plan will help you to focus on your goals and stay disciplined when emotions start to take over.
2. Be Patient
Don’t try to force trades. Wait for good opportunities to come to you. Trying to pick tops and bottoms is a recipe for disaster.
3. Manage Your Risk
Proper money management is essential if you want to be successful in any form of trading. Make sure you don’t risk more than you can afford to lose on any single trade.
4. Use Stop-losses
A stop-loss is an order that you place with your broker to sell an asset when it reaches a certain price. This will help you to limit your losses if the market goes against you.
Is Binary Trading Risky?
Yes. No matter which strategy you use, there is always risk involved. Many traders lose money in the process. Binary options are the most risky type of contracts in the financial markets, and therefore in many countries they are regulated as gambling.
The most important thing is to manage your risk. Make sure you don't risk more than you can afford to lose on any single trade. Always consult with a financial advisor before making any investment decisions.
With proper risk management and a solid trading strategy, there is a chance that you could make money from binary trading.
Expert Opinion
When starting out with binary options trading, it's crucial to have a solid strategy in place. Traders who simply jump in without an approach are setting themselves up for potential losses and frustration. The strategies outlined in this guide provide an excellent foundation for beginners looking to trade binary options systematically.
One strategy that deserves particular attention is trend following. By only taking trades in the direction of the prevailing trend, traders essentially put the odds in their favor. This straightforward technique aligns with the natural market flow rather than trying to catch minor fluctuations or reversals. Coupled with proper risk management, trend following can be a relatively lower-risk option for novices.
That said, I would caution against relying solely on any single strategy, no matter how simple or lucrative it may seem initially. The markets are dynamic, and conditions favoring one approach today may shift down the road. Versatility is key - gradually expand your arsenal to include complementary techniques like news trading and fundamental analysis. Continuously refine your skills through practice, education, and adapting your methods to evolving market behavior.
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Team that worked on the article
Ivan is a financial expert and analyst specializing in Forex, crypto, and stock trading. He prefers conservative trading strategies with low and medium risks, as well as medium-term and long-term investments. He has been working with financial markets for 8 years. Ivan prepares text materials for novice traders. He specializes in reviews and assessment of brokers, analyzing their reliability, trading conditions, and features.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
The topics he covers include trading signals, cryptocurrencies, Forex brokers, stock brokers, expert advisors, binary options. He has also worked on the ratings of brokers and many other materials.
Dr. BJ Johnson’s motto: It always seems impossible until it’s done. You can do it.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO). Mirjan is a cryptocurrency and stock trader. This deep understanding of the finance sector allows her to create informative and engaging content that helps readers easily navigate the complexities of the crypto world.