IQ option boasts of being one of the biggest, if not the biggest, binary options brokers. The Seychelles based binary options broker has over 25 million subscribers. Many have hailed IQ Option’s trading platform as one of the best trading platforms. Obviously, the high number of subscribers indicate that more people are probably making profits on IQ Option than anywhere else. Statistics indicate that only 5% of the people getting involved in binary options trading actually profit from it. That’s quite a small l percentage. However, considering we are talking of millions of people across the world, it is still a huge number of people.
So, what do these people who profit from binary options trading do right? What does it take to trade profitably on IQ Option? We like to emphasize having a strategy. You stand more chances of profiting from binary options trading if you have a trading strategy. There is a notion being actively sold in the inter-webs that anyone can profit from binary trading. In as much as there is some truth to it, it is not as rosy as they may make it look. If you trade in binary options without a deep understanding of what you are doing, you will be basically be gambling. We all know how gambling turns out in the wrong run.
We seek to educate you to enable you to trade in binary options profitably. We are going to look at the how you can use the Trends-based strategy to trade on IQ Option. It is important to mention the advice given herein is not a blueprint for making money on IQ Option. Ultimately, your success in binary options depends on how well you understand financial markets and your intuition. Let’s get right into the trend-based strategy of trading.
Trends-Based Trading Strategy
As the name suggests trends-based trading strategy involves studying the trend of the asset you are trading with on the financial market. It is a highly technical strategy. A common tool used in trend-based strategy is the trend channels. The trend channels tool allows you to draw trend lines over the pattern of the asset on the financial market. This trend lines form the basis of binary options trading strategy. Let’s explore the trend channels tool.
The Trend channel tool draws two lines over the financial market chart. One line over the highest price and the other over the lowest price. That immediately gives you the area you are working with on the charts as far as the prices are concerned. You will be able to judge that the price of the asset cannot go above a certain point within a certain duration based on how those lines have come along. The lines could either form a broadening wedge or a converging wedge.
While drawing the trend channel line. It is important that you consider the highest point with the most peaks. Draw a line over multiple points instead of a single high point. For instance, if you note three high points can form a straight line, and there is another higher point, draw the line over the three points instead of the single high point.
Basically, you are supposed to look for the line of best fit. Draw one for the high point and one for the low point. So, how do you leverage your trend line to be able to make correct predictions?
First, you should choose the correct asset. You can experiment with the assets that you have by drawing the lines of best fit over each. The ideal situation is where you have the two lines parallel, with as little stray points as possible. The trend can never be perfect, but the closer it is to the ideal situation the better.
The trend lines make the strategy quite simple. You need to be patient and observe the movement of the market. You need to be able to judge the average duration the market is taking to move from one trend line to the other. Once you have these parameters you will be able to place your trades timely. Timing the trade is also very crucial. You observe as the market moves towards one of the trend lines. Let’s say it’s moving towards the upper trend line. You expect the market to start moving in the opposite direction Immediately it hits the upper trend line. At times it may go above it with a small margin. Time a call trade such that the duration of the trade is not more than ¾ of the average time the market takes to move from one trend line to the other.
You have better chances of winning such a trade. Why? If the asset has adopted a trend, it is most likely that it will not change abruptly. Therefore, the average time taken for the chart to move from one trend line will remain the same as long as the trend continues. If you can perfectly time your durations, you have better chances of completing more winning trades. You need to be patient so that you get the timing right. Note that the chart will not touch the trend lines or might exceed them at times. If that happens a couple of time. You need to draw new trend lines. There are many other ways you can leverage the trend strategy to be able to make better predictions.
Evidently, the trend strategy is not that difficult to employ. IQ Option offers you various tools that you can use to employ the trend strategy. Your ability to read the financial market chart will determine how well the trend strategy works for you. You should be patient and let the market tell you when to make a trade and not the other way around. For instance, when you notice the chart is deviating too much from the drawn trend lines, its better you wait for it to rectify. You can also observe for a while longer and decide to draw new trend lines.
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