How to Make Money with Binary Options: Experts Use These 8 Winning Strategies

Do you want to know how you can make money with binary options? You are in the right place.

It is possible to make money with binary options. Smart traders generate profits consistently from binary options.

The question is, how do you make money from it?

That’s what this post aims to reveal.

Binary options are becoming increasingly popular every day. You must have heard of people that have made a lot of money by speculating if a currency will rise or fall. The best thing about it is that you can do it anywhere and at any time.

In this post, we will consider 8 powerful strategies that you can use to make money with binary options.

Read Also: How to Make Money with Day Trading

1. Trading along with trends

Irrespective of the market or asset that you are trading, one of the most effective ways to make money is to trade along with a trend. It is usually referred to as the best strategy that a beginner can use.

The prices of assets usually move according to trends. The price will either rise or fall with associated assets since the market is in real-time and it is always speculating.

A trend is not always straight; it is always going up and down. The price of an asset is usually seen moving in a zig-zag pattern; either in an ‘up’ or a ‘down’ direction.

It is important to recognize the pattern of the market to know if the price of an option will be higher or lower at expiry.

You can trade with trends in two ways; trading with overall trends or trading with swings.

If you want to trade with trends, it is advisable to focus on the overall direction of the trend. Most traders make a profit by paying attention to the general direction and then setting either an end-of-day or end-of-week expiry. This strategy is not suitable for short-term trades.

If you prefer trading with swings, you need to remember that trends move in a zig-zag manner. You can bet during an upswing or downswing to make more money within a short period. However, this is riskier than trading with trends.

Application of the strategy

To trade along with the trends, examine the chart and pay attention to the trend lines. If the line is flat, trade another option. However, if the line is going up, there is a high chance that the price will go higher (and vice versa).

When you find the right asset and trend, you can make money with binary options provided your speculations are right.

2. Trading with news

Although following news is one of the basic strategies of trading binary options, it is also good for making profits. It is easier than carrying out technical analysis. However, you need to read the news and be informed of what is happening in the market every day.

You can start with online news. Pick up newspapers, listen to news stations, and take advantage of as many sources of information as possible. The goal is to have an in-depth understanding of the asset before considering if the price will rise or fall.

Also, you need to consider human behavior when analyzing an asset. A piece of news that you consider to be positive may not be considered as great news by the market.

One of the disadvantages of using this strategy is that it is not possible to tell how far the price will go and how long the movement will last due to a particular event.

To increase your chances of making profits with this strategy, you need to consider the following:

Leverage the breakout

A breakout refers to a short window that exists between the news release and the impact it has on the market. It can either last for a few seconds or a few minutes.

In this strategy, you need to place a big bet due to the significant movements of price after the breakout. You can get better results by using high/low options.

Use boundary options

If you are certain that the price of a particular asset will move but don’t know the specific direction, check how far up or down the price will move, and employ a boundary option. This will help you make a profit, irrespective of the outcome of the news.

Application of the strategy

One of the most effective ways to use the news strategy to make money is to follow tech companies to know when they intend to make their next announcement. If you know that they are releasing a new product, you can buy options and wait for your profits.

SEE: How to Make Money with Forex

3. Straddle strategy

The straddle strategy must be used together with the news strategy. You must make straddle trades before an important news release.

The value of the asset may increase for some time after the news is released, but you must place a trade estimating that the price will go back in the opposite direction.

For instance, if you buy an option and the price starts dropping, you can buy another option expecting the price to go up again.

The strategy thrives on the swings of a trend. You will make some profits whether the price rises or falls. This strategy is considered one of the most consistent ways to make money, even in volatile markets.

However, note that you need to have good analytical skills and must also be experienced in the market to get good results from the strategy.

Application of the strategy

Let’s assume there’s negative news that will affect the price of gold. The price of gold will change drastically since investors have no idea about the direction that the price will move.

In this case, the companies concerned will try and find a solution to keep producing.

Using the strategy and leveraging the fluctuations in the market in situations like these is a great way to make money with binary options. You will make profits irrespective of what occurs in the long run.

4. Pinocchio strategy

This strategy is similar to the straddle strategy; it involves placing deliberate bets against the current trend.

In other words, if an asset is trending upwards, you need to place an option with the hope that the price will fall. If the asset is trending downwards, place an option expecting the price of the asset to rise.

Although newbies can use this strategy, it is important to have a deep understanding of the asset to get the right result from the strategy. You will be able to make the right predictions and make profits if you understand how the asset works.

Application of the strategy

To use the Pinocchio strategy, you need to first look at the asset’s candlestick chart that you want to trade. The market is bearish or bullish when the price is white or dark respectively.

If the candle’s wick points downwards, place a call option. Also, place a put option if the wick points up.

5. Fundamental analysis

This strategy is more of a tool that enables you to have a better understanding of an asset. The goal of this strategy is to gain information that will help you to profit from the asset.

You need to carry out an in-depth review of all aspects of the asset. You can then place a low-risk trade to see the outcome. Ensure you trade with an amount that you can lose.

After the trade expires, you will know if you can make a profit with the strategy and then put in more money.

Application of the strategy

Let’s assume you are not familiar with a particular asset but you know the market is volatile and that you may get to make some profits. You need to study the asset and then place a small trade to test if the strategy will work.

If the strategy works, you can put in more money to make profits in the short term. If it does not work, you will only lose a small amount of money and can retry.

6. Hedging strategy

Some people consider this strategy as being a lazy strategy and the reason for this is not far-fetched. The strategy involves placing both calls and puts simultaneously. It is similar to the straddle strategy in a way; you will make money irrespective of the direction of the price.

However, you need to calculate your loss to ensure you don’t lose all your money when the trade ends.

7. 1-2-3 framework strategy

The 1-2-3 framework strategy depends on value activity based on inversions. It is great for a fledging merchant and can be used with different systems.

8. Range/range breakout strategy

With this strategy, you develop the boundaries that we talked about earlier in the news strategy and grab boundary binary options by setting upper and lower values depending on your speculation on how the market will react when the trade ends.

You play the boundary by making use of multiple options and then try to make a profit irrespective of the destination of the actual price.

How Much Can You Make with Binary Options?

If you check different binary options trading forums, you will come across some posts that talk about traders’ earnings. Successful traders make at least $10,000 per month, so this is not rare.

The specific amount that you will make from binary options depends on your capital. Let’s assume you trade with $100,000 capital, even if you make just 10 % profit per day, that is $10,000 profit each day you trade successfully.

SEE: Best Binary Options Trading Platforms

FAQs

Can binary options make you rich?

Yes, provided you know what you are doing. The great benefit of binary options is that they provide more profitable investment tools than other forms of assets. If your goal is to be rich in trading binary options, it is possible.

However, this will not happen overnight. You need to have a solid strategy and must also have a long-term commitment, coupled with the right knowledge.

Can you lose money in binary options?

Binary options appear to be straightforward at the surface. However, most people lose money while trading binary options. In some cases, about 80% of traders lose money. But you can still make profits by trading binary options.

Is binary options trading safe?

Binary options trading is as safe as any form of the trade market. Binary options were approved by The United States Securities and Exchange Commission in 2008 but must be traded on a regulated U.S exchange. Traders throughout the world consider it as one of the safest forms of trade on the market.

Conclusion

I hope you’ve got the full idea of how you can make money with binary options.

Don’t forget that using a strategy once will not yield the result you want. You need to keep trading to know if a strategy is perfect for you.

Jumping from one strategy to another is not a good idea. You need to stick to a strategy and optimize it to align with your needs; this is the only way to make profits.

Now that you know some strategies that you can use to make money with binary options, test the strategies and master them with a demo account. Once you master a strategy, you can then take on the market with real money.

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Thanks for reading.