How to trade a series of trades in binary options

Admit it, at the beginning of the day I really want to open a deal, even if not all the conditions of the strategy are met. Such an entry often turns out to be unprofitable, which affects the emotional state of the trader. There are also cases when the strategy seems to give a signal to enter, but you feel uncertainty, do not enter the market, and then watch how the signal works out the profit. Only without you.

To help in such situations, a tricky trick is called upon — a series of transactions. This life hack was used at the beginning of the last century when trading stocks, so why don’t we take this technique into service?

Today we will consider in detail the psychological and tactical component of the “ladder” of binary options.

Psychology of the starting deal-ladder from binary options

When trading binary options «Higher / Lower», a correctly defined trend within the day will help the trader to stay profitable even if he / she loses part of the investment on contracts closed in negative territory. It has been proven that intraday one way trading is much more profitable than buying options in different directions.

Therefore, it is very important for a trader to be confident in his own forecast, which is psychologically dependent to a large extent on the first transaction, which is often erroneous due to the haste of execution. The level of financial losses in the market is directly proportional to the probability of error. A trader who receives a negative deposit will experience uncertainty or fear on subsequent forecasts and transactions, which will lead to a chain of errors and will only increase the loss .

Choosing an underestimated bet size for the first entry neutralizes the emotional return due to the low level of losses, which will make it possible to concentrate on an objective reassessment of the forecast. The profit obtained will technically confirm the correctness of the conclusions made and the «victorious» attitude, which is very important at the initial stage of work.

Easy start tactics when buying a series of binary options

Trading binary options within the day begins with a trend forecast based on the data or candles of the past session . In the event of a significant fundamental event,yesterday’s movement may cause the trend to continue, but, as a rule, a new day “starts from zero”.

Morning trades of a trader take place at a minimum of information, often the first forecast is wrong and cannot take into account the events that will take place during the day. It can be published political, economic forecasts of analysts or macroeconomic indicators, worse / better than preliminary estimates, etc.

The trading system , working on the data of the previous day, issues signals to buy binary options from the beginning of a new session and cannot predict the impact on the course of future events, as well as of current fundamental news . The rules do not allow a trader to ignore strategy signals or conclusions of his own forecasts of a graphical or other type of technical analysis . The only way to reduce the error price on the first trade is to reduce the investment size by up to 10% and shorten the expiration time.

In this case, the second deal, with the obligatory confirmation of the trend, should already go according to the standard parameters — 100% investment and standard expiration time. If the trend continues, the trader leaves the investment constant, but necessarily doubles the duration of the option. This allows you to avoid the moment of a strong and long-term correction or «lunch flat» — a mandatory period of «calm» that is present in any market instrument.

Recommended parameters of binary options

• Contract type: «Higher / Lower» (Call / Put)
• Premium amount — not less than 85%
• Expiration time for short-term series: М1, М15, Н1
• Expiration time for the medium-term series: M15, H1, H4

Timing of the first trade from a series of binary options

First entry point: 11-00 Moscow time or the first morning news release on the economic calendar , indicated by three importance marks.

The opening of European exchange trading is reflected in a surge in volatility inalmost all instruments due to a sharp influx of liquidity . Therefore, the exchangerate of a currency or other instrument, for which a binary option was opened a little earlier than 11-00 Moscow time, can significantly rise or fall, often changing in the direction of the future daily trend.

The chosen time of the first trade can indirectly confirm or deny the trader’s forecast. After the morning burst, the price freezes for a while, so there is no point in choosing a large interval for the option expiration.

The subsequent deal, on the contrary, has an increased contract duration, opens in the same direction — if the repeated forecast has not changed. Otherwise, when the trend reverses, the trader should start by opening an option on 10% of the «standard» investment.

It is advisable to combine the first entry when changing direction with the events of the economic calendar . This will help to take advantage of the volatility jump , as in the morning, first trade, as well as to compare the technical and fundamental forecast.

Limitations on a series of transactions on currency binary options «Higher / Lower»

If the second binary option is closed according to the trend in plus, and the rate for the currency pair has not gone beyond 50 points , then it is better to postpone the third deal. The same applies to the case of a strong growth of a currency pair (by 1% or more), entry at such maximum or minimum deviations, with a high probability, will not bring profit due to the mandatory correction.

An example of a series of trades in binary options

According to the results of the previous day, a clear growing trend was determined, the hourly candles of the current session at the time of the opening of European exchanges are above zero, so we open the first option at 11-00 for 15 minutes of expiration, choosing the direction — «Above», the size of the initial investment is $ 10 with the planned base $ 100.

The first candle at 10-00 (terminal time) closes the option with a profit, confirming the trend, so we place a “full” trade by purchasing an “Above” option for $ 100 for an hour, which also closes with a plus, strengthening our trend forecast.

Two consecutively profitable binary options give a signal to open the third, for a period of 4 hours, also closed with a premium. Three positive trades in a row is a signal to stop trading, because the next, fourth option would have been closed at the end of the session at 24-00.

Conclusion

In intraday trading, the largest percentage of errors occurs on the first trades and is mainly associated with a hasty entry . If for spot trading in such a situation it is possible to wait for a new wave of movement along the trend, then in binary options limited in expiration time, an error will bring an unambiguous minus.

Trading a series of trades with a minimal initial investment will help reduce this inevitable loss and significantly increase the overall profit of your strategy.