You may think that binary options strategies will be the same, but you are wrong. There are several distinct binary options strategies and each one has its own pros and cons. But if you have knowledge about the different types of strategies then it will be easy for you to know the best strategies to use in trading.
Bollinger bands and other strategies
Before we discuss the different types of binary options strategies let us start from the simplest of them all. The most basic binary option’s strategy is called Bollinger bands. It has been used to bet on the price and its movement in the range of 0.5% to 0.8%.
You may think that the binary options strategies have been used before but they have not. This strategy was first introduced in 1974 and has been used since. It is basically based on Bollinger bands and moving averages, which have a certain trend. Here, there is no conversion factor so it is very easy to predict the price movement.
Another common binary option’s strategy is the Fibonacci lines. Its origins lie with the ancient Greeks, who used it to forecast the price movements. In the same way, the Fibonacci lines are used to forecast the price movements and it is possible to draw one or two lines on a chart which goes along the trend line of the previous prices.
Lastly, the most complex of the binary options strategies is called the butterfly. It has been introduced in 1995 by the well-known author Peter Lynch. In this strategy, you are required to figure out the new low price of one security and purchase it at the price before the low.
If you are successful then you can hold it at a stable price and wait for a break in the trend. This strategy has been successful in many cases.
As we have mentioned before, these strategies are not easy to understand. If you want to learn more about it then you may consider joining a free forex education site. The strategy will teach you about technical analysis. The two parts of the strategy include technical and fundamental analysis.
In technical analysis, you will need to figure out the differences between the trends of two pairs. The data you need for this include the data on the price movement and the data on volatility. In technical analysis, you will also need to examine the shape of the trend, which is expressed as area under the curve. This gives you an idea as to whether you can make money or not.
With technical analysis, you will also need to learn about fundamental analysis. In this strategy, you need to examine the correlation between the trend of two pairs. Then, you will also need to study the good fundamentals of each pair. Fundamental analysis is easier than technical analysis as you can find many indicators to gauge this.