Friday, September 27th, 2013 by Michael Freeman
Whether you are a novice trader or a professional trader the ability to accurately predict the direction on an asset is crucial for your success. This simply does not happen by luck or random guessing; it comes through hard work and the playing of variables while using a suitable trading strategy. Today’s article is meant to give you, the trader, an easy to use checklist analysis strategy that is geared for end of day trading. End of day trading takes place between the closing of the New York’s financial markets and the opening of the Europe session.
Binary Options Trading Strategy: Identifying a Signal
In order to use this analysis strategy we must wait for the following three criteria to be met. The first criteria would be that we need to wait for a good trading signal. Just as every trader should you should be analyzing the markets, taking notes of trends, reversals and breakouts. Ideally this task should not take a long amount of time, no more than 30 minutes at the most unless the market is flat which typically that is not the case. One sort of rule to keep in mind is that if nothing looks good to you within the first 15 minutes then trading that day may not be worth it. It is always best to walk away while you are ahead instead of risking a trade that you are unsure will turn out in your favor.
The next condition that must be met would be checking the levels. Once you feel that you have found a possible good signal check the level of that asset, how is the order flow of that asset behaving? Order flow simple refers to way the asset is trending. What direction is the trend heading towards and is it climaxing or bottoming out? These are very important questions to ask yourself and once you have them answered then you can decide if the asset is still a good idea to trade.
The last thing we must do before placing our trade would be evaluating market conditions. You need to ask yourself is the asset trending or is it consolidating? Chances are if it is consolidating then you are better off avoiding that trading signal, however, if your asset is trending strongly in a favorable direction then you may have a better chance of winning your trade. If the signal you are analyzing is trending strong but the market conditions are not acting in your favor then try to avoid trading that signal. However, if your binary options trading strategy follows the three conditions that must be met and is acting in your favor then you are free to place your trade.
For more info on Binary Options Trading Strategy visit the Strategy Guide on the BinaryoptionsChannel.com