Complete Guide to Binary Options Trading on Pocket Option
1. Introduction to Binary Options
- Binary options are financial instruments that allow traders to speculate on the price movement of
assets within a fixed time frame.
Traders predict whether the price will go up or down, and based on this prediction, they either win
or lose the trade.
- On Pocket Option, you trade binary options on various assets such as forex, stocks, commodities,
and cryptocurrencies.
- The trades can have expiry times from 1 minute to several hours, giving you flexibility in choosing
short or longer-term strategies.
2. How Pocket Option Works
- Pocket Option is an online trading platform that specializes in binary options trading.
It offers an easy-to-use interface and several features, including:
1. **Multiple Asset Classes**: Trade on currencies, stocks, commodities, and cryptocurrencies.
2. **Flexible Expiry Times**: Choose from short timeframes like 1-minute to longer expiries.
3. **Demo Account**: Practice with virtual money to test strategies before risking real funds.
4. **Copy Trading**: Follow and copy trades from experienced traders.
5. **Low Minimum Deposit**: Start trading with as low as $50.
- Pocket Option allows you to place "Call" or "Put" options based on your prediction of whether the
price will rise or fall.
- **Payouts**: If you correctly predict the price movement, you receive a fixed payout (up to 90% on
successful trades).
3. Best Strategies for Pocket Option
- **Trend Following Strategy**:
- Use trend indicators like Moving Averages (SMA or EMA) and MACD to identify strong trends.
- When both indicators show a strong trend (up or down), place a trade in the direction of the
trend.
- **Range Trading Strategy**:
- Use Bollinger Bands to identify overbought and oversold conditions.
- Trade when the price is at the upper or lower Bollinger Band, predicting a price reversal.
- **Breakout Strategy**:
- Use support and resistance levels (identify with trendlines or pivot points).
- When the price breaks through a key level, place a trade in the direction of the breakout.
- **RSI Strategy**:
- Use the Relative Strength Index (RSI) with periods like 14 to identify overbought (>70) and
oversold (<30) conditions.
- Buy when RSI is under 30 and the price starts to rise; sell when RSI is over 70 and the price
starts to fall.
4. Indicators for Binary Trading
- **Moving Averages (SMA, EMA)**:
- Use 20-period EMA for a smooth trend. Helps confirm market direction.
- **MACD (Moving Average Convergence Divergence)**:
- A powerful indicator for identifying trend reversals and momentum.
- **RSI (Relative Strength Index)**:
- Helps spot overbought/oversold conditions to time entries and exits.
- **Bollinger Bands**:
- Good for volatility analysis, used to predict when the price is overextended.
- **Vortex Indicator (VI)**:
- Helps determine the strength and direction of a trend, useful for short-term trading.
5. Risk Management Tips
- **Only risk 1-3% of your account balance on each trade**. This helps you stay in the game even
during a losing streak.
- **Set stop-loss and take-profit levels** before entering any trade to limit losses and lock in profits.
- **Avoid emotional trading**: Stick to your strategy and avoid impulsive decisions based on market
fluctuations.
- **Diversify your trades**: Don't place all your trades on the same asset class or expiry times.
- **Use the demo account** to test new strategies and practice risk management without risking real
funds.
6. How to Use Demo Accounts and Test Strategies
- Pocket Option offers a **free demo account** with virtual money to practice trading strategies
before using real funds.
- **Test new strategies** in different market conditions (e.g., trending, ranging).
- **Track your performance** and review trades to identify patterns or mistakes.
- **Test risk management**: Practice setting stop-loss and take-profit limits to ensure your risk
control is effective.
- **Gradually move to real trading**: Once you are consistent with your demo results, start trading
with small amounts in a live account.
