Trading In The Channels – An Effective Binary Trading Strategy
Many strategies have been developed for binary trading; however, the classic financial trading methods remain the most effective strategies for this trading tool. Today, we will look at a technical analysis technique – trading in the channels of market fluctuations, allowing the trader to most effectively utilize the full potential of binary options. Trading in the channels can generate clear, efficient signals for trading, and offers the prospect of earning a stable high profit.
When examining the chart of any underlying asset, you can see a cyclical pattern of construction of quote fluctuations, which is the formation of certain corridors of the asset price during trend movement. This is what allows us to obtain highly accurate forecasts for contracts.
For the precise definition of quote price fluctuation corridors, the most effective means is to use the specialized chart tool “Channel,” which can be found on professional trading platforms. For example, this chart service is available on the terminal of the innovative Binomo broker:
This chart tool allows you to clearly delineate the boundaries of the channels of market fluctuations and generate precise trade signals to register positions.
So, in practice, the asset market fluctuation corridor is built in the following way – we join the local market extremes on the chart. Simply put, you need to connect the highs and lows of the price of the asset:
It should be noted that this trading system will provide the expected result only on a technological platform that includes the following parameters:
- An integrated working chart tool for building channels
- Precise market quotes (the strategy does not work on artificially generated quotes)
- A big list of assets to trade
- High speed and stability of the terminal
- The ability to use contracts with a short period of construction
- Non-stop trading mode
To the fullest extent, these trading parameters, as well as a set of trading services, can be found at the Binomo broker, who also offers a wide range of analytical information for trading and the minimum trading conditions – the cost of positions from 1 USD, the initial level of investment for trading from 10 USD.
Practical use of the effective strategy of «Trading in the channels»
The channel trading system shows good results with foreign exchange market assets, as they differ in their compelling level of fluctuation volatility, and build sustainable trends. We carry out the construction of price fluctuation channels on the chart of the underlying asset and proceed to profitable trading.
Here, there are two approaches to registering contracts:
The first – we register transactions only in the direction of market trend fluctuations at the moment of price rebound from the channel boundary:
This trading mode allows you to use contracts with expiry periods of up to 15 minutes.
The second method is used to trade contracts with short maturity periods of 60 to 300 seconds. Here, contracts are registered in two directions of market fluctuations according to the same rules – price rebounds from the channel boundary:
Thus, the classic technical approach to the formation of forecasts allows you to get the best return on the binary market in a stable mode of operation. Channel trading of binary options brings its fans no less than 200% profit on a weekly basis. However, it requires flawless execution of the money management rules, which include using contracts with costs that optimally correspond to the sum of your operating funds. The rules are simple – to reduce risks and losses, you want to use transactions with minimal costs or use contracts worth up to 3% of your capital funds.
By utilizing this simple analysis and observing the rules for limiting risk, the trader will see steady profit growth in their trading account.