Strategy for Creating a Binary Options Trading Plan-JB88

Strategy for Creating a Binary Options Trading Plan

In this way, trading is no longer a seasonal activity that is only interesting to do when there are really interesting opportunities, but an effort to get profits that can be arranged to be able to bring profit consistently. Basically, every moment can be a profitable opportunity if the trader can recognize the potential profit in every market condition. Therefore, forex traders arrange trading plans to plan trading activities according to their abilities and needs. Adjustments arranged in a trading plan will clearly bring better and more convincing results, namely the opportunity to consistently profit and minimize the risk of loss.
Making a trading plan (trading plan) is often emphasized on forex traders who seriously make their trading activities a means of investment in order to bring profits on a regular basis.


here are 2 opinions circulating about this trading plan. First, the trading plan must be long and complicated. Second, trading plans do not need to be difficult, just need to make a list of targets that need to be achieved. To be able to arrange a good trading plan, you need to take the middle path of the two perceptions above. The trading plan does not have to be too complicated, but it is still made with enough effort to achieve the target. Making a trading plan is not determined by time, because the time or not required depends on the ability of traders to find an effective system and have a high profit probability. To support making a trading plan like this, there are a number of steps that you can follow, including:

1. Preparation

At the preparation stage, you are required to be able to dig up information about trading methods and recognize which method is most compatible with your trading style. In addition, determine your purpose in trading. Will you use this trading advantage as an additional income or even as a source of income. The following are the problems that you must solve so that your trading plan can be structured properly:


In the case of determining a trading instrument, you can choose an instrument that you often trade. Trying to trade with familiar asset price movements will simplify your analysis. For example, if you were a forex trader before, you can choose forex binary options as your main instrument. However, you can also try other trading instruments such as stocks, stock indices, or even commodities, if you feel you are able to analyze better in these markets. In addition, there is still an intermarket analysis that can allow you to trade with various types of instruments.

Every business definitely needs a goal so that it can be planned according to the target. In trading binary options, you might find it easier to get hooked on opening options without a plan. This is due to the ease of option placement and short expiry time options. By setting goals, you will be more motivated to place options according to the trading plan.

2. Rules of Entry

In determining the strategy for entry position, you will be faced with a variety of choices. This condition is generally related to making the right trading strategy. If at the preparation stage you can determine the appropriate trading method, then determining the entry rules for each option position that will be placed will be easier. For example, you choose to become a daily trader, all you need to do is:

Determine the right time frame. For daily traders, the commonly taken time frame is D1 down. In this example, you take the H1 time frame as the main time frame, H4 as the higher time frame to observe the long-term trend, and M15 to find the right entry position.

Manage trading analysis, both technically and fundamentally. At this stage, the use of technical indicators to news analysis can be the main key that determines the success of your option entry. For example, you apply the MA indicator and wait for the crossing signal to start placing the "call" or "put" option. Here, you can also use a price action strategy to confirm the direction of price movements. Meanwhile, at the time of the release of important fundamental data, you can wait until there are several candles formed after the news is released to be able to trade according to the direction of the trend of price movements.

Exit Rules

Unlike the forex market, binary options traders need to estimate the exit time to close the option at a certain level. For that, taking expiry time is a very important step and can be another determining factor for the success of your binary options trading. If you previously have a trading signal to open an option position according to your trading style, you only need to set the following steps to find the right exit position:

  • Determine the type of trading you will use. There are various types of trading options ranging from high / low, touch / no touch, to in / out of boundary in binary options. All types of trading can provide many interesting exit options. You can estimate whether the price will rise or fall (high / low), touch or avoid a certain level (touch / no touch), or be within or outside a certain price range (in / out of boundary).


  • Consistent with trading strategies. The choice of trading method is usually accompanied by taking the appropriate expiry time. If you are a scalper, you can use a 5 minute, 15 minute, or even 60 second strategy. With a trading strategy set according to expiry time, you can place options with consistent exit rules.


  • Use the rollover or early closure feature if necessary. To limit losses, you can use rollover and early closure facilities. However, the use of this service can sometimes add to the loss if you are not really sure of the potential loss of your option. Therefore, the use of these two features needs to be considered carefully so as not to increase the risk of loss.

Risk Management Arrangements

Limiting potential risks can be done by determining the amount of capital in accordance with the loss limits that you can use. Generally, the loss percentage determined from the total trading funds is not more than 10%. If you have a 5% risk limit, then you can place a capital of $ 5 on each option placed if your trading capital is $ 100.
You can also specify the number of options that you can trade in a certain period of time. This is done to limit the risk of overtrade, or opening too many option positions. For example, you set a limit to open options 3 times a day. In a trading scenario in a binary options broker that does not offer a refund, your maximum risk of loss is $ 15 per day. If your broker offers a refund for options that expire out-of-the-money, say 10%, then the risk of loss you need to bear will not exceed $ 13.5 per day. You can set the risk limit to a lower level, because the determination of capital is based on percentage loss on trading capital, indeed it needs to be adjusted to your psychological readiness. Do not let you set a percentage that is too large and you cannot afford the loss.

conclusion

At this stage, you need to evaluate the position of the option that you have run. Whether it works or fails, every evaluation of an option will produce learning material that is very useful for developing your binary options trading system. Some things that can always be improved by the system are the selection of trading instruments, the use of trading strategies, and risk management.

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