Binary Options Signals

June 22, 2013 11:11 am

binary_options_signalsBinary options signals are one of the things that you’ll need to master if you want to be successful. These signals are basically sets of events or other occurrences that can help you trade the right binary option at the right time. There are probably hundreds of types of signals that are divided into two categories – exit and entry signals.

If you want to be good at binary options trading, then you should be familiar with these signals and know how to spot them. Finding these signals won’t be easy, but if you have some experience with technical analysis, you’ll quickly get the hang of it.

However, before talking about technical analysis and signals, we’ll tell you about some of the most important things you must remember as a novice binary options traders.

Here are 8 tips that will help you jump start your trading career:

Risk Management
Manage your money and never invest a large portion of your bank that you can’t afford to lose
Every trader has a unique trading style that he follows. Find out your style and prepare a set of strategies that you’ll use. The four most popular type of traders are the swinger, scalper, technical and momentum trader.
Read the News
The importance of news is often underestimated by traders, but this is a big mistake. Financial news often offers a quick and easy way to predict an asset’s price.
Prepare an Exit Strategy
Traders often make a huge mistake by becoming too greedy and missing the right time to exit. Make sure that you always minimize the risk of losing more than you can afford.
Don’t be scared to Take Risks
Many novice traders lack confidence, and this often prevents them from making money. If you see an evident signal, then you shouldn’t by afraid to follow it and open a trade.
Not everyone can be a Trader
If you are an emotional person, then trading may not be the right choice for you. Emotional traders usually lose their money, because they are either too greedy or too scared.
Find the Right Broker
You won’t make money if you don’t find a broker that meets your requirements and offers a trading platform that suits your needs.
Use the Demo Account
Most brokers offer a free demo account and we strongly recommend using such an account to get familiar with the broker’s platform.

Basic Entry Signals

Hammers and Hanging Man

Hammer and hanging manThe Hammer is one of the first signals most traders learn and it is very possible that you are familiar it. Even if you are not, we’ll tell you everything you need to know about this signal. In short, the Hammer is represented by a single candle which has a very small body and a larger shadow that is usually larger than the body itself. This signal can usually be seen on the bottom of a downward trend. When you see such a sign in this position, then you’ll know that the market will soon become bullish and change its course. Keep in mind that if the candle is white, then the market is more bullish. The surest way to confirm this signal is to wait a day and check the market – if the trend has turned into a positive one, then the signal was correct.

Cup and Handle Formation

cuphandle-jblThis is a slightly more complicated signal, but once you get familiar with it, you’ll see that it isn’t so difficult to read. In order to use this signal, you’ll need to use a charting tool. Thanks to this signal, you can quickly spot both entry and exit signals. Check out the image below – the ‘base low’ clearly shows that this might be a good time to play the downside. The upside is a bit riskier, so you should only trade it if you are planning to sell short.

The Bear Trap

Bear-TrapThis is a deceptive signal that you can use to take advantage of the actions of other traders. The chart shows a very slighttly declining pattern which is mistaken for a trend by many traders. They start placing short traders, expecting that the price will go down further, but their actions lead to the opposite, and instead the asset’s price recovers.

Bull Trap

bull_trap_binary_optionsThis is another deceiving signal that is easily mistaken by novice traders. The chart shows that the price is going into a declining reversal trend, but in truth this is just a short change, and the asset’s price will keep going down.

It is defined as a trap because the bullish investor purchases the stock, thinking it will increase in value, but is trapped with a poor performing stock whose value is still falling.

Harami & Doji Cross

harami-1This is another simple signal that is usually known by even the most inexperienced traders. The Harami is a big candlestick that stands right before a Doji cross. The cross fully covers the candlestick’s body as you can see in the image. Usually, such a signal means that the trend will reverse. If you want to be a successful trader, then you’ll have to learn everything about these signals, because they can be your biggest helpers when it comes to trading binary options. Keep in mind that these signals won’t work as efficiently as you expect, unless you have a proper trading strategy.

Where to Trade

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