Do you want to make a lot of money fast? Then, binary options are the perfect trading instrument for you. To maximize your earnings, you need a strategy that will generate a lot of trading signals. The more trading signals you create, the more trades you can win and the more money you can make.
There are, however, a few unique challenges to a trading strategy for many signals. This article will show you which strategies for many signals will work for you.
Which strategies can generate many signals?
To generate many signals you need to trade a short time frame and keep the expiration time of your binary option short. On a short time frame, the market will create more candlesticks in the same time than on a longer time frame. The more candlesticks the market creates, the more signals you can deduct from them.
The down side to using shorter time frames, however, is, that the market will move more erratic. It will change direction more often and create shorter price formations. To be able to trade a strategy with many signals successfully, you need a strategy that can handle the unique challenges of the erratic market environment on short time frames.
Your strategy has to be quick to adapt to new developments, and still reliable enough to generate trustworthy signals. Here are a few strategies that accomplish that goal.
1) Use leading indicators
In general, there are two types of indicators you can base your trading strategy on: Leading and lagging indicators. Leading indicators precede new market movements and are especially helpful in non-trending market environments. Lagging indicators follow market movements and are especially helpful in a trending market environment.
On short time frames, the market moves too erratic to create long lasting trends. Therefore, lagging indicators such as moving averages are less helpful. Random market swings can make these indicators less reliable and rob them of their predictive powers.
Leading indicators, on the other hand, are a great way to anticipate the market’s next move. Leading indicators such as oscillators can help you distinguish weakening movements that will turn around soon from movements that will keep going strong for the next periods.
Depending on the prediction made by the leading indicator, you know whether to keep investing in the continuation of the current movement or in an impending change of market direction.
2) Use simple candlestick formations
Strictly speaking, candlestick formations are leading indicators, too. Nonetheless, they are so important to predicting what will happen on short time frames that we list them as a single point.
Candlestick formations can consist of only a few candlesticks. Simple candlesticks are formed by only one candlestick or two to three candlesticks. Since longer chart patterns, such as continuation patterns and reversal patterns, are too complex to form on short time frames, simple candlestick formations are the perfect instrument to predict the market in such a fast paced environment.
Be aware, though, that simple candlestick formations rarely create long lasting trends. Therefore, there predictions are only valid for the near future. As a rule of thumb, the prediction of a formation is never valid for more periods than the number of periods the formation contains.
3) Trade swings
On short time frames, you will rarely find long lasting trends. Instead, the market will create many short lived trends, and swings in a non-trending environment. To trade binary options successful in that kind of market environment, you should focus on trading each swing individually, not the entire trend.
4) Use short expiration times with high / low options
Market movements on short time frames are erratic and short lived. If you are trading high / low options, you should therefore keep the expiration time of your options short. Otherwise, the movement you invested in will be long over by the time your option expires.