If you are new to binary options trading you should probably read my “Binary Options Explained” post first, to ensure you know what binary options are. If you are already aware, keep reading, to learn the very simple but lucrative strategy I’m using to trade binary options at IQ Option.
Disclaimer: Any opinions, news, research, analyses, prices, or other information offered by us here in this Binary Options Trading Strategy, is provided as general market commentary, and does not constitute investment advice. boaa group Limited will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
As promised before the binary options trading strategy I’m going to explain to you here is quite simple and works on any trending asset. Besides an existing trend we also need the following indicators. I’m not going to explain the indicators itself but assume that you are aware of what the are indicating. If not, please leave a comment below or use Google.
RSI – Relative Strength Index
We are going to setup the RSI indicator for a period of 13 bars and defining 75% as overbought and 25% as oversold. You may choose colours that make it easy to see when the RSI crosses above or below the defined threshold.
As there are more settings for the Stochastic Oscillator I’m not going to write them down, so please just copy them from the screenshot below.
IQ Option Chart Setup
For binary options trading that expire within a few minutes we need to set our chart to show one minute candles. Anything below that is to volatile to be interpreted properly and anything above doesn’t have enough candles visible to actually find any good entry points.
That’s it. We are all set to find the right asset to trade.
Step 1 – Identifying a Trend for Binary Options Trading
As mentioned above this binary options trading strategy works on trending markets, therefore we need to look at bigger timeframes (hourly, daily) and look for a trend channel. You may use the graphic tools within IQ Option to mark it. You may also want to check if there is a visible trendchannel on the one minute timeframe as shown in the screenshot below.
As we can see above, EURUSD is in a clear uptrend on the one minute timeframe at the time of righting this post. This uptrend is a smaller trend within the mayor uptrend on the daily timeframe as seen on the picture below.
Step 2 – Monitor the 1-Minute Timeframe
Now that we have identified the general trend as well as a trend channel within the one minute timeframe, all we have to do is wait for the proper moment to enter the trade.
Note: If there is no valid trend within EURUSD just check the other available assets until you find one.
Most traders are going to tell you that patience is very important, and they are right. But don’t worry, there are going to be more than enough opportunities to enter a good trade, so there is no need to rush. In fact during the three and a half hours writing “Binary Options Explained” and this post, I’ve made four trades in total, without watching the chart all the time (although I ignored proper money management in the first one).
Step 3 – Place a CALL or PUT Option
Whenever both RSI and Stochstic Oscillator are above the upper line and start to revert we are placing a PUT Option expiring within the next 15 minutes.
Whenever both are below the bottom line and start to reverse up, we are placing a CALL Option expiring within the next 15 minutes.
Note: Don’t pick options expiring within one or two minutes but rather pick those expiring in 10 to 15 minutes.
Looking at the screenshot above you can see that bot indicators are above there upper lines and are starting to reverse. Therefore I placed a PUT Option expiring in eleven minutes.
Step 4 – Monitor your Option
Instead of just waiting eleven minutes doing nothing, I’d advice you to pay close attention to the chart. If the price is moving in your favour IQ Option will allow you to sell your option early for a smaller profit (or loss if the price isn’t moving in your favour and indicators indicate that it’s not going to change).
Most of the time you won’t need to sell your options, especially if your knowledge in trading is quite limited. So for the beginning until you’ve developed a deeper understanding of everything, just lean back and don’t worry about where the price goes.
Step 5 – Wait for your Option to Expire
Now all that’s left is to wait for the option to expire. Be aware that there is no way to predict the market correct 100% of the time, therefore it’s important to stick to a proper risk management.
As you can see above, our strategy worked and our option was profitable resulting 80% profit on my 4.72€ investment. Which may not seem like a lot of money to you but considering a 1% money management as mentioned in “Binary Options Explained” it’s still a 0.80% increase of my accounts balance.
In the above post I’ve described a very basic binary options trading strategy, showing you how to trade binary options at IQ Option, which is allowing you to find proper entry points on all assets, as long as the asset is currently in a trending and not ranging market. While writing “Binary Options Explained” and this post I’ve been able to execute a total of four trades on EURUSD, without monitoring the charts all the time.
I understand that you might ask why somebody would share his profitable strategy with others? Well, the answer is quite simple, some of you are going to sign up using my referral links and are going to lack the required patience and therefore end up losing some money, which is going to cause IQ Options to pay commissions to me, while others are going to use this strategy the way I explained it and maybe show their gratitude for the profits I’ve caused them by any of the methods mentioned on our Support Us page. In other words, I’m counting on a few greedy readers as well as a small amount of people being grateful for this article, making it a profitable decision to share this strategy with you.
As always if you’ve got any questions or comments, feel free to leave them in the comment sections below or discuss them on our Discord server at https://discordapp.com/invite/b24knx.
General Risk Warning: The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.
- 08.02.2018: Added General Risk Warning at the bottom of this “Binary Options Trading Strategy”
- 08.02.2018: Adjusted “Step 5” of this “Binary Options Trading Strategy” to reflect that it doesn’t guarantee any profit.