Day trading binary options
What is Day Trading?
There are many securities on the stock market these days that can bring you income. A binary option is quite lucrative. Many brokers have a return percentage of 60-90% (depending on the time of day, the assets and the terms of the contract). Trading is done through an options broker and the trades depend on the current market price at the time of the trade. This is one of the most volatile forms of trading. This means that the potential profitability of such trades can be extremely high.
So what is the nature of this asset? When you buy a binary option, you need to specify how the price of the asset will change at the time of expiry, that is at the end of the trade.
There are an incredible variety of binary options on the internet. Here are the most popular ones:
1. The traditional 'Call Put' / 'Up/Down' option. The idea behind these trades is to tell you if the value of the chosen asset will go up or down in a certain period of time. If you think the rate will go up, you hit "Call"; if you think it will go down, you hit "Put". This is the easiest option, and is the one most beginners and experienced players choose.
2. "One Touch". The important thing here is that the price reaches the set price level at least once in a period. It might bounce back, but that is no big deal.
3. "In/Out" or "Edge" - Making a trade to buy an option, with the prediction that the price will stay in a certain price corridor, or out of it.
4. "Ladder ". You must predict that the price will touch certain levels in turn. In Ladder, you have many levels, and as each one touches, you get more and more money.
These are simple types of binary options which you can find at different brokers. Start with simple ones, so you can get into the game easier.
Expiration is the time when all the delivery obligations are fulfilled and the final settlement between the parties in the transaction is made.
Traditionally, there are 3 big types of binary options, according to contract holding period:
1. Short-term from 30 seconds to 5 minutes. Market players who engage in short-term options trading and make the maximum number of trades during a trading session are called scalpers and the selling operation is called scalping. Among them, 60-second turbo options are best known.
2. Mid-term. Contract execution time is from 5 minutes to several hours. Intraday binary options trading is a great example of a balanced buying strategy.
3. Long term options last from one day to a year. Requires experience and detailed knowledge of market analysis methodology.
Day trading binary options are worth a lot of attention, as they are something of a golden mean.
They include a convenient deadline where you don't have to wait long for the contract to expire and get nervous about the result, with enough time to apply the various types of analysis as accurately as possible. Fundamental and technical analysis is generally applicable to intraday binary options trading. And the combination of the two will give the most accurate readings. Fundamental analysis in this case refers to the release of economic and political news. For instance, if you speculate on shares of a company, it is worthwhile to keep an eye on the latest company news, management changes, new product launches, etc. If something has happened, it is likely that the price will also show movement in the near future.
It is also worth noting a significant advantage of such tactics. The fact that the market analysis and the search for entry points takes place on higher timeframes, and there is known to be very little market noise, and the signals are clearer and more verified, respectively, the trade is associated with less risk.
The timeframe is the time interval, which is used to convert the quotes (current price of the asset) into the elements of the chart. It allows a trader to see how the price changed within this interval. The timeframe is represented in the form of ready-made elements - it may be points on a line chart, bars or Japanese candlesticks.
One of the key strategies in day trading binary options is to capitalize on small price movements by investing substantial amounts in highly mobile stocks or indices. Using such a strategy, a small increase in the value of a financial instrument can lead to significant profits. But you should also be aware that even a small decrease in price can lead to a significant loss. Be careful and use all your skills and analysis.
Technical analysis for day trading binary options
Special technical analysis for day trading binary options can be a valuable tool for those wishing to profit from market volatility. You can use patterns and indicators to know the mood of the market.
There are many types of signals that are used in technical analysis. Each of them has a specific function and can be used in combination to create a successful trading strategy. Why should you use them? They can help you better understand what is happening on the market. You do not want to enter the market without knowing how to understand everything yourself.
How do you know if an indicator gives the right information? Try to study it at different timeframes and back up the signal of the indicator with fundamental analysis.
The most popular indicators are:
1. A classic trend indicator, "Moving Average". This tool works on the principle of calculating the average value of the asset for a given market period.
2. MACD is a comprehensive tool for assessing market conditions, extending the range of trading signals and making accurate forecasts. Functioning of the MACD indicator is based on the use of two lines of market evaluation by means of moving averages. Apart from them, a histogram is displayed on the chart. To make a profitable deal you should take into consideration all components of the indicator.
3. RSI . Some traders consider this automatic algorithm to be one of the best and often use it in various strategies. When working on the chart, it determines the trend direction, its strength compared to the previous calculation period, as well as market areas with a high probability of price reversal, i.e. overbought and oversold assets.
4. The Stochastic is also very useful in showing the price spread over a period of time when the trend is in progress. Mathematically, Stochastic expresses the relationship between the closing price and the range of highs and lows for a given period as a percentage value between 0 and 100.
Binary options analysis is not an easy task. If you are willing to put in the effort and work hard, you will win.
As you become more adept at analyzing indicators, you will be able to determine the best ones to follow. As you gain experience, you will be able to determine when is the ideal time to start or end a trade, depending on the indicator.
In technical analysis, there is also the graphical method of analysis, which is just as popular as the indicator method, which can be used to identify patterns on a chart and can also tell you a lot. The chart analysis of binary options can be classified into several categories based on the varieties encountered. Many traders use lines, ticks or tick charts as well as the indispensable in trading Japanese candlesticks, bars, the unconventional Renko and Kagi charts. Each of these types is currently relevant and can be used by traders as part of their trading strategy.
The chart in the form of Japanese candlesticks is considered the most popular and the most comfortable for studying market phenomena in order to analyze hindsight and make forecasts. It is distinguished by the highest level of informativeness compared to other types.
A Japanese candlestick chart looks like bars (bars of a histogram), and each bar indicates the change in price in relation to a certain period of time. The lower part of a candlestick shows the opening level and the upper part shows the closing level. These candlesticks are usually called bullish when the market is in the power of buyers. If the opposite happens, then they will be called bearish, hence, the market is dominated by the sellers' forces.
Each candle has a shadow, or tail. It indicates the price extremum (minimum or maximum) of the trading asset. When a shadow appears, it means that prices have moved out of the opening and closing values, but then returned to the range.
Although applying technical analysis to binary markets can be challenging, it can help you make large amounts of money. However, you must make sure that all your entry and exit decisions are well thought-out and based on solid principles. In this way, you will get more profit from the binary options you have and your daily activities.
How to start day trading binary options in the Philippines?
It's very easy to start trading binary options in the Philippines in today's world. Because now you can place bets, track your profits and losses in your personal account, communicate with traders and all this from the comfort of your home, on the broker's platform.
To register on the platform, you will need just a few minutes of your free time. Then you can start by opening a demo account online on the website. This will give you a feel for the market and help you make trades using no real money. You can then decide if you want to trade with your own money. It's a great way for new traders to get to know all the options on the site, the terminal, the indicators, and to apply different strategies with virtual money. That is, you do not risk anything. However, you will not make any profit either. Everything stays inside this virtual account.
A demo account can help you learn more about the binary options day trading system. It can help you develop the skills you need to trade these assets.
For those who have previous trading experience, or who are just confident in their abilities and want to play for real, you can open a real account. Make a deposit into your account and start trading. Start with a small amount and gradually build up your investment. You will do well, try it!
Also, after you sign up, you will be able to watch the video tutorials on various topics, including binary options, and you can read the chapter with answers to the most common questions from investors - you will definitely find lots of useful information there. This is a great source for those who know little about these contracts or the market. Education is never superfluous!
If necessary, the broker on the platform will give you leverage (loan), very often day trading binary options players use this kind of margin trading, it helps them to make more profits.
Learning how to day trade binary options in the Philippines is not difficult. It is important to have a good understanding of the contract and be willing to spend the time and effort to learn the best ways to trade it. Start trading now!