Digital options information that is useful for a trader to know

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This One Tip Will Make You a Better Trader

As a trader you’ve have probably been told many times not to yield to your emotions. It is, however, much easier to remain calm and professional when dealing with a series of successful deals than when losing. A lot of investors believe learning how to lose is the single most important skill you as a trader can ever acquire.

Nobody is immune to losing. Good trades lose, too (sometimes quite a lot). But in the end of the day good traders earn more than they lose. Trading is rarely about constantly winning. Rather it is two steps forward, one step back. As long as you keep your average loss smaller than an average win you are good to go.

If you have a negative position that makes you uncomfortable don’t be afraid to get out of it, as it is always possible to get back in. Your unwillingness to close a position, that is going against you, can deplete your account in no time. In other words, remember to cut losses.

Quote by Kareem Abdul-Jabbar

In order to keep up with the previous point, take advantage of a stop-loss. Not only it is a great way of setting a specific level of loss you are willing to take, it is also a great tool to automate your trading activities. Even if you do not use stop-loss orders, decide when to get out (should the trend turn against you) even before you open the deal.

When trading instruments with no set profitability (Forex, CFD etc.) learn how to maintain a positive record by winning less than 50% of your trades. Sounds strange — and for some even impossible — yet it still can be done. The abovementioned is hard to achieve if on average you lose and win approximately the same amount of money. However, as soon as you let your profits grow and cut losses at the same time, this is much easier to achieve. Keep your losses small, do not exit a profitable deal prematurely and you are quite likely to be in the green by winning 20% to 30% of your deals. Even if you win in 60% of the deals, you and your trading systems should be prepared to an unexpected loss streak.

Indeed, losing right is more important than winning right. Winning deals don’t matter until you manage to get consistent results, which is only possible when you know how to control the risk. Learn how to tame it and watch your trading results improve dramatically.

NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
In accordance with European Securities and Markets Authority’s (ESMA) requirements, binary and digital options trading is only available to clients categorized as professional clients.

GENERAL RISK WARNING

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
87% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

4 Effective Trading Indicators Every Trader Should Know

When your forex trading adventure begins, you’ll likely be met with a swarm of different methods for trading. However, most trading opportunities can be easily identified with just one of four chart indicators. Once you know how to use the Moving Average, RSI, Stochastic, & MACD indicator, you’ll be well on your way to executing your trading plan like a pro. You’ll also be provided with a free reinforcement tool so that you’ll know how to identify trades using these forex indicators every day.

The Benefits of a Simple Strategy

Traders tend to overcomplicate things when they’re starting out in the forex market. This fact is unfortunate but undeniably true. Traders often feel that a complex trading strategy with many moving parts must be better when they should focus on keeping things as simple as possible. This is because a simple strategy allows for quick reactions and less stress.

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If you’re just getting started, you should seek the most effective and simple strategies for identifying trades and stick with that approach.

Discover the Best Forex Indicators for a Simple Strategy

One way to simplify your trading is through a trading plan that includes chart indicators and a few rules as to how you should use those indicators. In keeping with the idea that simple is best, there are four easy indicators you should become familiar with using one or two at a time to identify trading entry and exit points:

  • Moving Average
  • RSI (Relative Strength Index)
  • Slow Stochastic
  • MACD

Once you are trading a live account a simple plan with simple rules will be your best ally.

Using Forex Indicators to Read Charts for Different Market Environments

There are many fundamental factors when determining the value of a currency relative to another currency. Many traders opt to look at the charts as a simplified way to identify trading opportunities – using forex indicators to do so.

When looking at the charts, you’ll notice two common market environments. The two environments are either ranging markets with a strong level of support and resistance , or floor and ceiling that price isn’t breaking through or a trending market where price is steadily moving higher or lower.

Using technical analysis allows you as a trader to identify range bound or trending environments and then find higher probability entries or exits based on their readings. Reading the indicators is as simple as putting them on the chart.

Trading with Moving Averages

One of the best forex indicators for any strategy is moving average. Moving averages make it easier for traders to locate trading opportunities in the direction of the overall trend. When the market is trending up, you can use the moving average or multiple moving averages to identify the trend and the right time to buy or sell.

The moving average is a plotted line that simply measures the average price of a currency pair over a specific period of time, like the last 200 days or year of price action to understand the overall direction.

Learn Forex: GBPUSD Daily Chart – Moving Average

You’ll notice a trade idea was generated above only with adding a few moving averages to the chart. Identifying trade opportunities with moving averages allows you see and trade off of momentum by entering when the currency pair moves in the direction of the moving average, and exiting when it begins to move opposite.

Trading with RSI

The Relative Strength Index or RSI is an oscillator that is simple and helpful in its application. Oscillators like the RSI help you determine when a currency is overbought or oversold, so a reversal is likely. For those who like to ‘buy low and sell high’, the RSI may be the right indicator for you.

The RSI can be used equally well in trending or ranging markets to locate better entry and exit prices. When markets have no clear direction and are ranging, you can take either buy or sell signals like you see above. When markets are trending, it becomes more obvious which direction to trade (one benefit of trend trading ) and you only want to enter in the direction of the trend when the indicator is recovering from extremes.

Because the RSI is an oscillator, it is plotted with values between 0 and 100. The value of 100 is considered overbought and a reversal to the downside is likely whereas the value of 0 is considered oversold and a reversal to the upside is commonplace. If an uptrend has been discovered, you would want to identify the RSI reversing from readings below 30 or oversold before entering back in the direction of the trend.

Trading with Stochastics

Slow stochastics are an oscillator like the RSI that can help you locate overbought or oversold environments, likely making a reversal in price. The unique aspect of trading with the stochastic indicator is the two lines, %K and %D line to signal our entry.

Because the oscillator has the same overbought or oversold readings, you simply look for the %K line to cross above the %D line through the 20 level to identify a solid buy signal in the direction of the trend.

Trading with the Moving Average Convergence & Divergence (MACD)

Sometimes known as the king of oscillators, the MACD can be used well in trending or ranging markets due to its use of moving averages provide a visual display of changes in momentum.

After you’ve identified the market environment as either ranging or trading, there are two things you want to look for to derive signals from this indictor. First, you want to recognize the lines in relation to the zero line which identify an upward or downward bias of the currency pair. Second, you want to identify a crossover or cross under of the MACD line (Red) to the Signal line (Blue) for a buy or sell trade, respectively.

Like all indicators, the MACD is best coupled with an identified trend or range-bound market. Once you’ve identified the trend, it is best to take crossovers of the MACD line in the direction of the trend. When you’ve entered the trade, you can set stops below the recent price extreme before the crossover, and set a trade limit at twice the amount you’re risking.

Learn More about Forex Trading with our Free Guides

If you’re looking to boost your forex trading knowledge even further, you might want to read one of our free trading guides . These in-depth resources cover everything you need to know about learning to trade forex such as how to read a forex quote, planning your forex trading strategy and becoming a successful trader .

You can also sign up to our free webinars to get daily news updates and trading tips from the experts.

Free Trading Video Tutorials: Forex, Strategies and More

Not all traders know that there is a special section on the IQ Option platform dedicated to video tutorials. There you will find all sorts of videos: about trading instruments, indicators, strategies and important patterns you, as a trader, could find useful . Videos are useful for grasping basic concepts of trading in a relatively short period of time and at the same time complement information you get from other sources.

Here is how to access the tutorials when using web or standalone versions of the IQ Option application. First, push the ‘More’ button in the bottom left corner of the trade room. Then click ‘Video tutorials’ and pick the category you would like to explore.

It is even easier to find the video that you might be interested in when using a smartphone. Click on the ‘Play’ button on the left-hand side of the screen and choose the video from the corresponding category. It is as simple as that.

What can you expect from IQ Option video tutorials? They are short videos (usually under 2 minutes) packed with useful information and strategies. Here’s how to start trading Forex.

By watching this video you will learn how to trade using one of the most common technical analysis instruments — the moving average. And by the way, here is an even more in-depth guide for those interested in this technical analysis tool.

In trading, every detail is important. Did you know that even the chart type can make or break your deal? Well, now you do. Here is more on the topic of chart types. Here is the video that explains the same concepts in a more concise manner.

What is the difference between a buy and a sell option? What is the best portfolio composition? How to trade news? Video tutorials cover all these topics.

Proceed to the trading platform to get access to more than a hundred useful video tutorials.

NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
In accordance with European Securities and Markets Authority’s (ESMA) requirements, binary and digital options trading is only available to clients categorized as professional clients.

GENERAL RISK WARNING

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
87% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Top Binary Options Broker 2020!
    Best Choice For Beginners!
    Big Sign-Up Bonus!
    Free Trading Education!
    Free Demo Account!

  • Binomo
    Binomo

    Only For Experienced Traders!

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