Trading Breakout Strategies in Binary Options

19 Nov

Trading Breakout Strategies in Binary Options

Trading Breakout Strategies in Binary Options

Setting a strategy to find the right entry position is one of the most important trading steps. Not only to increase the opportunities that can be achieved, but also to complete the trading plan in order to obtain satisfactory long-term results. Also, you can use Bitcoin Code. As discussed in the article on trading plans in binary options, entry rules are one element that can determine the success of the execution of the trading plan itself. Therefore, this article will discuss more about one of the recommendations of the entry strategy, in example the breakout trading method.

Why Breakout?

Binary

In trading in the forex spot market, regular traders recognize a breakout strategy as a way of trading that relies on price breaks at key levels. Be it support or resistance, price movements that shot from one of these levels are considered as a golden opportunity that can bring in a lot of profits if traded correctly.

Price movement formed after penetrating the key level is often expected to advance to a level much higher or lower than the previous position. This condition is very useful for forex spot traders whose profit is derived from the pips in the order sell or buys that installed. For binary options traders, placing entry in the direction of the breakout will give additional confidence to the option opportunity to end in-the-money. In addition, traders will also be more flexible in determining expiry time, as prices tend to be in the same trend for long periods of time after penetrating one of the key levels.

Compared with a reversal strategy that aims to put a “put” option when the price is at the highest level and places the “call” option when the price reaches the lowest level, breakout trading is more widely used because it is considered to have a higher profit opportunity. By leveraging momentum, breakout strategies are capable of delivering promising entry signals, and are fairly easy to implement and are suitable for newcomer traders.

Conclusion

Many technical tools can be utilized to complement this breakout strategy. Usually, the trader will look for the support and resistance indicator to find the right key level. Many choose to use Fibonacci or pivot points and combine them with other indicators when trading with breakout methods. However, traders sometimes need a lot of learning and familiarize themselves with the use of both indicators above, because Fibonacci is subjective, while the accuracy of the pivot point is still considered doubtful. Traders are advised to frequently practice and familiarize themselves with the use of both indicators in order to achieve maximum results. Click Here and you can find the best technical tool.

The key level can actually be determined from the support and resistance limits of other indicators. Traders can make the MA trendline and line as a more flexible max support and resistance. In addition, there is also an analysis of chart pattern that can provide breakout signal without having to install and set any technical indicators.