Best Binary Option Strategy
We have discussed earlier the Binary options trading from scratch. We disclosed the basic concepts of binary option in which we covered everything need to start with a binary option such as call/put and strike price. If you are new to binary option and don’t know how to start? Then, please read this article before going with this Best Binary Option Strategy.
To trade binary option we need entry earlier than the directional move to grab ITM So, there can’t be an idea better than including support/resistance or demand/supply in our trading approach “binary option simple strategy” because these are the extremely accurate points where it is a more apparent bounce of price occurs.
Let’s define support and resistance in a practical way.
- Support is the zone where the price does not go lower or we can say that the zone forms demand to result in the rise of price.
- Resistance is the zone where the price does not go above or in another way the zone creates supply to result in the fall in price.
- Price breaking above resistance becomes support and price breaking below support becomes resistance.
How to draw a valid support and resistance?
|Note:-Some of us are also confused in relating the chart time frame with expiry? Maybe one of you also has a question like this, In which time frame we analyse the trade to enter if we want to take an expiry of 15 mins in Binary options? I suggest better you make your own way of comfort. Some of us trade the 15 mins expiry by analysing in 15 mins and some of us take expiry of 15 mins by analysing in 5 mins chart.
Drawing support and resistance is easy but drawing a strong and valid the same is quite difficult.Most of us draw the support and resistance in the same time frame(the time frame in which we confirm the entry and stop).We can make it more reliable by considering the time frame higher than the time frame we trade in. For example, if we enter the trade on the basis of 15 mins chart we should at least trade on the support and resistance of 1 hr or 4 hr chart.Simply we will open the chart of 1 hr or 4 hrs and draw the support and resistance and finally switch to 15 mins chart.It will be showing the zone created on 1 hr or 4 hr.We can also adjust the support/resistance of higher time frame in lower time frame if any smaller deviation seems.
Steps to be followed:-
- Go to the higher time frame as I have worked in 4 hr chart to draw support/resistance.
- Click on the line chart ( It shows you clear swings)
- Draw the horizontal support and resistance(click on horizontal line in tool box and connect the two swings at least to draw it)
- Switch to the smaller time frame (as I worked out in 15 mins chart) and click on candlesticks chart, Everything could be found as we worked on 4 hr chart here. You can also adjust the support/resistance line for a smaller oddity in smaller time frame price.
- Wait for the price to come into your zone as the price touches you zone make a call/put depending support or resistance bounce. If bounces from support make a call and make put if bounces from resistance.
- If we take in to contemplate the higher time frame support/resistance we won’t need to confirm with other indicator but the candle behavior must be taken into your attention.
In this example, I have taken EUR/USD 4-hour chart to draw support and resistance.
Here we have constructed the horizontal support/resistance.
Now switch to the lower time frame.
See the arrow on support and resistance, Every time it(price) comes to the zone retraces back.
The expiry can be taken in this way 15 mins to 1 hr( if the workout is done on 4 hr chart).
To increase the probability we can only make the entry in trending direction.But this way works in anti-trend also if a trading binary option with this.
The other thing you can do, see some form of pullback or candlestick if you do not want to trade the early entry.This way will need the confirmation and patience.But I trade the early entry without waiting for any formation, as it touches my support/resistance I see a smaller break to the upside or downside in resistance and support respectively.See In below picture.
I wait for this kind of break from support/resistance and enter the trade. It makes my trade very accurate because the first candle at least closes above the support (if you took entry below the support at least two points and the price does not go with the force and closes at support, you will have ITM) and below the resistance.
Visit us again. In next article, I will discuss many ways to trade with support and resistance.