5 Minute Binary Options Strategies Everyone Should Know About
Ever since the Binary Options became popular, people are constantly comparing their strategies, claiming they discovered the holy grail of trading. Enough is enough.
Not every trading strategy is suitable for anyone, but if you don’t know any of the Minute Binary Options Strategies we are about to discuss, you might be seriously missing out. We are talking about one of the most popular binary options expiry time: 5 minutes.
The challenge of Minute Binary Options is certainly the time frame. As the options change every minute they present a risky and volatile trading option. But despite its volatility, the minute binary options often sustain a trend that is long enough to be useful for some profitable trades.
When checking the trends you can check the 5-minute candles or even go with 1-minute charts. It really depends on the type of trader you are. You have to be self-aware and see what works best for you.
When talking about assets, there is no category that performs better in the 5 minute time frame. Still, most binary traders prefer forex, commodities ad indices. People like to trade them as they are traded globally, and move convincingly in the short time frames as they are more liquid than other stocks.
So without further ado, let’s talk about the strategies that you definitely should include in your trading arsenal.
Trading on price action is the most straight forward way of trading. All you have to do is pay close attention to the price movement, recognize the way the action behaves to make your trading decision. Previously this type of trading was done by watching the ticker tape. Today price action trading is much easier and more fun. You can just use a charting package like MT4. You can set the charts to 1,2, or 5 minutes and take it from there. Patterns include head and shoulders, triangles, flags, diamonds, etc.. If you know how to read them, you can quickly recognize continuations or reversals on the market.
Pro Tip: When trading with 5-minute expiry use 1, 2 or 5-minute charts for the best results.
You can adapt most strategies to all of the mentioned time frames. You have to know that the shorter the time frame, the less reliable the signal. Signals on daily candlesticks are stronger than hourly signals and hourly signals are similarly stronger than minute charts.
Scalping strategies are trading techniques that rely on short time periods. These strategies incorporate some of the signals but generally ignore the trends. When scalping you make a trade on what will happen in the market in the next period. This often means minutes, usually not more than 10. With scalping you don’t care so much about the trend, you only focus on which direction the market is going at this moment, and if it will keep going in the same direction so you can make a fast trade. When using similar strategies, you should use 5-minute charts to give yourself the best chance.
Japanese Candlestick is quite simple on its face value. They are nothing more but an expanded way of putting price data on a chart. But keep in mind, that they give a variety of very useful signals that can be used in many different trading strategies, even scalping. When you learn how to use them you will be introduced to a whole another level of trading. Candlestick signals are good with any setting, depending on your preferred trading method.
Trading the Momentum
Momentum is an essential part of price action and trading in general. Whenever prices move, the market has some sort of momentum. It is the amount of force behind the move and it presents the collective of people and their money, buying or selling an asset. Those trends can happen in various time periods. When you want to trade momentum, you should use an indicator like MACD or stochastic. If you notice that momentum carries the price too far in one direction, you can expect that the price will bounce back the other way. Using 1 to 2-minute charts is the best option when using these type of strategies.
When there is a lot of momentum in the market for sustained periods of time, we can talk about trends. The trend is a long term movement of the price, where the price generally moves more in one direction than another. Trends can be well analyzed and predicted. When using trend trading strategies you should notice the corrections in the trend and use them as an entry point. Trading with trends can be very reliable, and one of the oldest saying in trading: »the trend is your friend« is there for a reason.
Check out this video below to see the multi chart features on IQ Option UAE:
Options Brokers to go With?
If you want to trade binary options you will need to find the right brokers to go with. We have just recently published an article covering the best brokers for binary options trading and a different article where we published a detailed review on IQ Option and IQ Option UAE