Most strategies for binary options are based on time frames from 1 minute to 15 minutes and expirations of 1-3 candles, but such fast trading has many disadvantages that can lead to a quick loss of your deposit.
And since most brokers provide the opportunity to buy binary options daily, it is worth considering such trading and possible strategies.
Pros and cons of binary options daily
There are many more pros than cons to day trading binary options compared to turbo options and intraday trading.
Pros of day trading binary options:
- You can carry out any type of analysis, since the higher the time frame, the better and more accurate the indicators of any type of analysis will be due to the absence of noise, which is characteristic of small time frames.
- The timing of trading sessions does not matter in binary options day trading.
- There is no need to constantly be near the monitor and monitor every price movement. It is enough to carry out an analysis and make a transaction, and then return to the terminal the next day.
- There is no rush and psychological stress, since small fluctuations do not matter for binary options for the day, while minute expirations require quick decision-making, and every second can be decisive.
- Possibility of working on a bearish or bullish trend , since trends tend to be long-lasting on large time frames, while intraday fluctuations can occur over a wide range in different directions.
- Possibility of trading with a small deposit, since there is no need to make many transactions that require a “safety cushion”.
- Low risks when trading and ease of use of money management and risk management rules, since the calculation of the number of positions, trading volume and risks is carried out once a day and is revised only the next day.
The only disadvantage of trading binary options daily is the long wait for the result, but even such a disadvantage can be called controversial, since a trader’s profitability is measured in months or years, and not in one day.
How to trade binary options daily?
To trade daily binary options, you will need to find a broker that allows you to trade daily options with an expiration of 1 day or 24 hours:
Broker Binarium is one of such brokers. You can also find other brokers in our rating of binary options brokers .
You should not use the D1 time frame for trading, since it is always more difficult to understand how just one candle will close than several candles. Therefore, the H1 time frame is perfect for analysis.
To buy options, you can use various types of analysis, such as:
If we talk about volumetric analysis, it is not at all suitable for beginners, since it takes a lot of time to study it, but for professional traders this approach can bring much more benefits than any other.
Fundamental analysis also cannot be called simple, since it involves not only tracking news in the economic calendar , but also analyzing economic statistics of different countries and studying many indicators. And although this analysis is also not suitable for beginners, it can still be studied through articles from the Internet or books on trading .
The simplest of the above types of analysis is technical, since it involves many subtypes, such as:
- Trading by levels.
- Trading using trading strategies and indicators for binary options .
- Trading with the trend on a clean chart .
In daily binary options trading, you can use the same strategies or indicators that are used for small time frames, but expiration, accordingly, should be used in 1 day or 24 hours.
Binary options trading strategies for the day
Options with daily expiration can also be traded using standard indicators, but with the obligatory use of the trend, since corrections usually last no more than 4-5 hours.
Also, you should not buy options before the release of important news, since at such moments it is not always clear how the price will behave and just 1 hour can ruin a deal that will last 24 hours.
Trading binary options daily using the Stochastic Oscillator indicator
Standard signals of the Stochastic Oscillator indicator (exit from overbought or oversold) can be easily used for trading binary options for the day. The main condition in this approach is the presence of a trend and trading only in the direction of this trend:
Note how in an uptrend most corrections will be profitable when traded with an expiration of 24 hours, and also note that it is worth ignoring the indicator signals when leaving the overbought zone, as such trades would be made against the trend and would generate a loss:
Trading binary options daily using the Bollinger Bands indicator
You can also use the Bollinger Bands trend indicator in medium-term trading.
The image below shows the same fragment of the graph as the previous example. Please note that signals for buying options appear at almost the same points at which the Stochastic indicator generated its signals:
And in the same way, all signals against the trend should be ignored.
Recommendations for trading binary options daily
Despite the fact that such trading can bring profit, no one is immune from losses, and at moments of trend reversal, many indicators or strategies can signal the purchase of a Call option, although the price will eventually go in the opposite direction after a few hours.
Therefore, you should always manage your capital wisely and observe risks.
It would also be more correct to create your own strategy for medium-term trading, since the examples given above are not universal and may not be suitable for a certain market or trading style, and also require refinement and filtering of some signals.
And most importantly, after choosing a trading strategy, you should definitely test it on history, and then trade it on a demo account to see its disadvantages and understand what a trader can expect when trading binary options using this strategy .
Conclusion
As you can see, trading binary options with a 1-day expiration can be quite profitable if you understand medium-term trading and understand how the markets work and how the trend works.
Beginners should definitely test such trading on a demo account, since if they immediately start trading on a real account, it may turn out that this style of trading and such long expirations are not suitable for the trader psychologically.
See also:
What is the best way to fund your account with a broker? TOP 10 ways
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