How to Avoid Rookie Mistakes ¦ Binary Strategies in South Africa

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Binary Options Strategies

Many will say that binary options are a thing of mere luck. You either guess or not, right? Wrong! Binary options are not gambling, but a form of financial investment that offers an innovative way of participating in financial markets. To be more successful and increase your chances for positive results, make sure to implement binary trading strategies.

Binary strategies are used for mindful binary trading. Most of them have several steps that guide the trader through analysis and help them achieve the desired goal. Also, there are some simple strategies and more complex ones, so every trader can find one that suits him best. Don’t forget that strategies can also be combined and should be revisited every now and then, especially in case some of them turn out to be less successful.

Most traders prefer to start with simple strategies and progress towards more complicated ones, especially as they become more familiar with binary options trading. Some might say that it is impossible to predict binary options trading results, but market changes can be predicted when the right approach and strategy are used. Whether or not will one accept the results of the analysis or will decide to trade on the hunch is another thing. However, proper education should never be neglected.

Top 5 Starting Strategies

After you have officially decided that you will start your binary options trading journey, you will quickly find out that this is not a game or a luck, but a project that needs to be strategically put together if you want to have a possibility of being successful in it. This is why binary options strategies are the way to go. However, not all strategies are alike and not all can be applied in every possible trading setting.

As with anything else, there are plenty of strategies you can find online that are connected to binary options trading, but you need to be careful which ones you will be choosing and why. The most important thing is that you feel comfortable with the ones that you do end up picking as your go-to strategies. With all this in mind, it is important to highlight that binary options trading are very much dependant on the fluctuations of the global market which is a huge system of every changing variables, but even in something that seems so chaotic, there are certain rules that can be applied and followed.

Diversification Strategy

Not one strategy is foolproof, which means that there are never any guarantees that any of the strategies you choose to employ is going to always work. This is why it is never a good idea to place all your funds into one trade. This is simply not a smart move from a strategic point of view. You should always diversify the funds that are at your disposal to several different investments – ideally no less than ten trades. This is a great approach because it allows you to leave room for the possibility that not all of your trades are going to end up in the money.

Five Minutes Strategy

This particular strategy is a fairly simple one. It is founded on the premise that the majority of the brokers on the market will allow you to buy options within the 5 minutes of their expiry time. The strategy is basically that you then invest some time into manually searching the global market in search of an asset which has a pretty consistent growing or declining trend. Regardless of the fact that this might seem like a guarantee, we urge you to keep in mind that binary options trading is unpredictable in the majority of cases and you always need to be prepared that things will not go as planned.

Martingale Strategy

While certain very experienced traders will often use this strategy, we have to note that this is a very risky one as it primarily relies on the factor of luck. The basic premise of this strategy is that you always double next amount you are going to invest and you keep doing so until you actually win a trade. So if you lose a $100, your next trade should be $200 and so on, until you will a trade. As you can see, it takes a lot of psychological stability to keep using this strategy because if you give up while you are on your downward spiral, you will end up losing a lot of money. However, you are able to track down a trade which is very stable in its grown or on its downtrend, for longer periods of time, you could assume that the trend will stay the same and place your trade on this one.

15 Minutes Strategy

The 15 minutes strategy implies that you track an asset on the 15 minutes time frame and if the 3 consecutive candles are of the same shade, you wait for a rollback. This strategy is also something that is worth going into a lot of details with as it is not the easiest of the strategies, but it could prove to be a good fit for certain traders who are already fairly experienced with the market trends.

Triangle Strategy

Triangle strategy basically instructs the traders to trade when they notice an increase or decrease of the price but only if the corresponding chart has actually formed the figure we need in this case. When we have an uptrend, the triangled that is formed in the chart will be and ascending triangle. In the descending triangle it is clear that the trend is going downward.

How to find a perfect strategy

Obviously, a lot of binary options traders in South Africa are on the lookout for their perfect strategy. This raises the notion that there is such a thing as one perfect strategy for everyone, which will determine your trading success. This is clearly not the truth as it is impossible to find a single strategy that will work each and every time you apply it simply because the market is prone to a multitude of fluctuations on a daily basis. We will, however, try to answer the question most of you must be wondering: ‘how do I find a trading strategy that will suit my needs?’

By looking at certain main points that are important for every strategy, you will soon find out what is and how to find your perfect strategy.

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The Perfect Strategy For You?

There is nothing more deceiving than believing that you will find one perfect strategy that will work every single time. That simply is not going to happen, and most of all, that should not happen as this would completely shatter the foundations of the global trading market itself. However, like we mentioned before, some strategic moves can be beneficial to your investment plans and smart traders know that.

There is no single strategy that everyone can use but there are ways to find out which would suit you the most considering your trading needs and overall investment plans. The best thing you can do is not to look at what has been working for other traders, because other traders are not you. You have different aspirations, goals, investment plans and techniques so naturally, applying a strategy that has worked for someone else and expecting it to work the same for you is simply not realistic.

Character Type is Very Important

Each individual trader is different so it only makes sense that you do not believe when another trader tells you that they have the most amazing strategy that has worked for them, and that it will certainly work for you. In addition, do not copy other people’s investment plans as you will not be able to get the same results so it really does not make sense.

When choosing a binary options strategy that fits your character and your trading needs you need to keep in mind that you have to adequately assess your psychological tolerance to stress and potential losses. This will determine which strategy you can feel comfortable with and then you can calculate all the other variables necessary for the decision.

One thing you could to to test things out is to try out several different strategies so you could find out exactly how they work and how they might be managed to suit your particular needs. This is best done via brokers Demo account as you can experiment in a risk-free environment in this case.

Do you need a perfect binary options strategy?

If there is only one thing you will take from this guide, let it be the fact that you actually do not need a perfect strategy. Yes, this might sound like a very big contradiction to everything we have said so far, but if you think about it, it really isn’t. You do not need a perfect strategy because the isn’t a perfect strategy anywhere, but there is great strategy that might be a good fit for you. This is the most important difference – you need a strategy that can be successful and which makes you comfortable using it.

Considering there are so many trading options and features you can use to customize your trading strategy it is impossible to say what exactly you need to do to set it up to work for you. The best way you can come to any kind of a conclusion is to activate a Demo account with a great binary options broker which offers one and get accustomed to your trading surroundings and the way in which the customization is affecting your trades.

As long as you are being successful with your trading approach, and your profits do outweigh the losses that are bound to happen from time to time, do not burden yourself with the thought of a perfect strategy but rather focus on what is in front of you and grow your experience accordingly.

Binary Options Rookie Mistakes

When trading binary options, many traders in wonder how to trade successfully and avoid rookie mistakes in binary options. This is a very important question since all traders want to have positive trading results from the very beginning and to achieve that, they should invest wisely when trading binary options.

Some of the most common rookie mistakes are:

  1. Overtrading and forced trading
  2. Not having a solid trading and money management plan
  3. Lack of education
  4. High self confidence
  5. Rushing with trading

Further in this strategy article, we will provide more detailed information regarding how to avoid rookie mistakes in binary options.

Avoiding Rookie Mistakes – the Initial Step

As a key factor how to avoid rookie mistakes in binary options is to have a good strategy plan. This is important since traders can’t rely just on luck element if they are planning to trade binary options for a longer period of time.

In case of investing in shorter periods of time, such as 1 minute, there is no point to make a plan or study trading charts for 4 hours period if expiry time will be very short. Therefore, strategy plan has to be in accordance with expiry time, otherwise trading process will not be successful and originally planned.

All binary traders also have on disposal to use patterns which can also be useful when trading with different assets in binary industry. Trading patterns, such as flat pattern or zig zag are helpful in providing traders with detecting the best expiry time of chosen asset.

Choose the Right Time of Expiry

Unlike trading on different financial markets, in binary options traders need to set on their own desirable expiry time for asset they want to trade in. on some occasions, traders can feel disappointed when asset price stays “in the money” during with entire time just to change price direction when final results becomes a failure.

This is a common rookie mistake for majority of beginners, since they are faced with an expiry time which is not set properly as it should be. It happens when market goes in predicted direction but it doesn’t stay there for entire trading period.

Money Management for Rookie Traders

Having money management plan is a good ticket that will help you avoid rookie mistakes in binary options. This is very significant when trading binary options since traders’ goal is to eliminate bad trading results.

So careful approach in creating a good money management plan can be to divide funds in several equal parts and afterwards, each divide in smaller amounts. Such diversification is desirable since it is advised not to keep all “eggs in the same basket”. Binary options traders are able to choose between expiry times of few minutes, hours up to trading expiry by end of week, month and even 150 days.

Traders who prefer riskier trades, often choose trading with 60 seconds or up to 2 or 5 minutes. However, if traders’ goal is to invest in binary options for longer period, they will most likely invest in expiry times by end of week or month. In this period of time, they are able to plan their moves and perform a right strategy.

Try Demo and Be Focused

Binary trading is not a profession for most traders. Binary traders usually have careers in different fields, and as everyone else, are prone to stress and have to face many challenges. It can easily happen that you lose control and focus.

One of the main benefits of binary options demo accounts is that they will prepare traders for binary trading. There is no real money involved and trader only has to place trades with virtual money. The demo trading platform has everything just like the real trading platform, but it is also offering no real profits. The virtual money makes every win virtual, but also helps to understand the platform better and avoid losing the concentration when real trading takes place.

Traders should also be rested, and try to control the level of stress. Stress can be caused by different trading factors such as unpredictable market movement or a lost trade, but also by different situations in our private lives. Rush hour, family relationships, business problems or simply a long line in a supermarket can cause stress.

That is why it’s so important to learn stress management from the very beginning. Always try to focus on trading, try to isolate your emotions and be objective when it comes to trading. Don’t let overconfidence control you when you are winning, or fear block you when you are not achieving your goals.

By implementing technical analysis and other trading tools, traders in South Africa and all over the world have an opportunity to avoid rookie mistakes in binary options, such as overtrading and start their trading journey with a success.

Hedging or trading without risk strategy

In regular financial trading, the hedging is when two opposite positions are opened and as soon as there is a clear direction for further trend, losing position is closed and profit continues to gain momentum. In this embodiment, the strategy is still not without its risks, however, in the case of binary options, this strategy has been redesigned and upgraded, allowing it to maintain profits from two counter deals.

How to Use This Strategy?

This strategy is designed for long-term (preferably 5-10 hours) transactions in volatile assets trading. These indicators need to at the time of the transaction, the price of the asset has had time to change dramatically in one direction or the other.

For clarity, we will show you the work of the strategy with an example. As the most volatile asset, we usually opt for EURUSD (Euro against the U.S. dollar) currency pair. After studying the history of the daily asset the trader identified entry points.

Before deciding to trade you need to determine the time when the currency pair is situated at essential points:

Trading Process in South Africa

We have found that around 11 am, the currency was near its minimum, to 18 hours, it has reached the maximum and by 20 o’clock EURUSD back to the mean. After checking a few more days and noting the pattern of behavior, we have appointed the time to enter the market and option’s expiration time.

According to the previous statistics, at noon, waiting for the price starts to turn around, we opened the first long position, over time, end at 20:00 (to specify a specific time of closing the option, we use the designer options function).

By 18:00, we waited another moment of price reversal and opened another deal for the same amount and with the same expiration period, but in the opposite direction.

By 20:00, both positions were closed at a profit, but the point of this example is not that. The essence of this strategy is to open opposite positions with greatest distance from each other to increase the chances of a successful outcome.

Suppose that the two positions were opened in the amount of $100 and the percentage of profit on the asset was 80%.

Initial investment = $200

We are investing $100 in each transaction – 200 dollars which we do not want to lose, that is why we resort to hedging.

If stock options will be closed within a given corridor, we get $180 from each transaction in the end – return our $200 + $160 net profit.

If the options are closed off a corridor, it is still one position will be closed at a profit in the end – lose one investment of $100 and get a profit of $180.

The ratio of profit and risk is impressive, even if 8 transactions 7 times closed off the corridor (which is very rare), you still save your money. You can achieve consistently high earnings repeating this strategy many times.

What is a Trend?

All those who have ever dealt with any sort of trading will be familiar with the notion of “trend” and just how important it is.

Yet, if there are South Africans who are only now venturing into financial trading via binary options, in this strategy article we will attempt to explain the key factors concerning trend and also offer the explanation of what is a trend.

In short, trend is among the most important elements which every binary options trader has to take into consideration before they begin to trade with any underlying asset. Actually, it is possible to view it as a helpful trading tool.

In fact, the importance of trend is so relevant to the point that no matter the strategy or approach being used in the binary options trading process, most of them will also take into consideration the current trend to try and make their estimation of the market situation as exact as possible.

So, one might simply say the definition of the trend is the prevailing direction of the price of the underlying asset. The trend is usually set across several time periods in which short and term trends frequently occur and play their part in much larger trends. The trend can run in a time span which might be days, weeks or even stretch to months or years.

To use the information provided by the current market trend, traders have to monitor the trend during the duration of their trading process and are advised to always take into account the larger trend rather than short term-one.

Yet, for those South African traders who want to use trend to spur their trading success, the deeper knowledge and understanding of several important components connected to trend are an absolute must.

Bearish Vs. Bullish Trend

Terms bearish and bullish are often applied when describing a market trend.

Bearish Trend – the downward trend in which traders are aiming to buy the “put” options.

Bullish Trend – the upward trend in which traders are aiming to buy the “call” options.

Majority of traders monitor the trend by following the trend line which aids traders when it comes to making a decision concerning their trading process. The trend is put in a more powerful position via corrective waves while impulsive moves marked by various fluctuations bring about a solid base for trending.

However, what prospective South African traders need to keep in mind is that most markets spend considerable amount of time in in the so called consolidation areas rather than in trend-friendly conditions.

Yet, what sustains traders in during those prolonged consolidation periods is the ability to spot and identify a strong trend and profit from it.

Elliott Wave Trend in Binary Options South Africa

The Elliot Waves trend can be described in terms of impulsive moves which is, essentially, when the market is moving in a certain direction.

The key is to successfully interpret those moves and the principal market movement in order to use the information to their benefit.

For the impulsive mode to be formed five waves are necessary, or at least a five-wave structure containing the minimum of three impulsive waves. The other two waves in the structure are the corrective ones which makes this instance the right moment to start the buying spree.

So, it is possible to say that the theory behind the Elliot Wave trend claims that various levels exist during which traders ought to select the call option and that is dependent on the market wave formation.

Another useful trading tool South African traders can utilize is the Fibonacci tool.

This tool is most effective during the period when one wave on the market just ended and a next one started. The key is to measure the length of the first wave since that will tell the traders if the trend was bullish or bearish.

In the first instance, South African traders should go for the call option, and in the second one the traders are advised to rather opt for the put options instead.

Utilizing the Trend Strategy

One of the most important skills when it comes to utilizing the trend strategy is knowing when and how to change the trading strategy according to different market situations.

And to develop that skill, traders have to invest time, patience and will to learn and develop their approach to trading binary options constantly.

It makes little sense to study the trends in a five-minute chart in, say North America, if that session is nearing its end and the session in about the begin in Asia.

Hence, to spot the perfect moment to buy or sell an option is the key ingredient of successful binary options trading. By selecting the favorable striking price and by combining that with the right expiration date the successful binary options trading takes place.

In taking time to study and understand what is a trend and how to use it properly, that goal could be attainable for South Africans looking to have a positive binary options trading experience.

Best Binary Options Brokers 2020:
  • Binarium

    Best Binary Options Broker 2020!
    Free Trading Education!
    Free Demo Account!
    Perfect for Beginners!

  • Binomo

    2 place in the ranking!

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