Combination Strategies-Binary Trading Strategies

The review of binary option trading strategies essentially implies a pure approach—putting on one strategy at a time. In fact, this is rarely recommended.The alternatives to pure strategies are combination strategies that look to benefit from a variety of market conditions during a week. What should be considered is a mixed set of strategies. For example, putting on three deep-in-the-money trades with one deep-out-of-the-money trade.Alternatively, the trader could be putting on three deep-out-of-the-money,three deep-in-the-money, and four at-the-money trades.

Two combined strategy examples are:1.three deep-in-the-money with one deep-out-of-the-money.2.one-third deep-out-of-the-money, one-third deep-in-the-money,and one-third at-the-money.There are many different strategies to match a variety of market conditions and technical patterns. It’s a good idea to try all of them over time to build your skills .This chapter has provided a tour of how binary option trading strategies are intimately related to understanding not only the technical conditions of the market, but the fundamentals and the prevailing sentiment moods.

Selecting the Right Underlying Market:Leaderboard Selection Strategies Beyond being able to scan market patterns and follow news events, trading binaries comes down to selecting the right underlying market to trade. Many traders have a tendency to trade what they like, rather than spend time scanning the global markets. The disadvantage of trading what one likes lies in the potential of missing other profitable opportunities. A remedy to this myopic tendency is implementing a Leaderboard Selection Strategy.

Th e leaderboard selection strategy answers the question of which markets are the big movers? A good way to choose what to trade is to trade what the markets are paying attention to.At any moment in time during the week, some markets are outperforming others. In other words, some are hot and some are not. A good idea is to select the best performer and the worst performer as targets for your trades.

A useful Internet site for fi nding the latest movers in the market . It provides what is known as a “heat map” of price movements. Th is is a quick way of spotting the big movers in either direction. In the heat map that follows,the JPY and the CAD are the biggest winner and loser in terms of relative performance. Th e binary trader would, using this leaderboard, look for trading opportunities in these two underlying markets.