Types of Trading Strategies a Beginner Could Adopt

trading strategies

Source: www.quora.com

Since online trading had become so popular in recent years, more and more people without a previous economic or financial background had been drawn into this industry.

We want to focus particularly on binary options trading. For those of you who are not familiar with this topic, check out one of our previous articles to see the differences between binary options and forex.

 

Categories of trading strategies

There are two major types of strategies that beginners usually adopt when trading binary options:

  • Betting type trading strategies – these strategies assume that the trader will try to apply in trading some betting strategies. One of the betting strategies that is usually chosen is martingale and we’ll talk about it in greater detail in a future material. Also, traders are using betting strategies combined with the economic calendar since they are trying to exploit the volatility that is generated around important events.
  • Market behavior strategies – in these strategies, traders rely on technical and statistical data, trying to understand why a certain market behaves in a certain way and also understanding the order flow behind any particular move. These strategies take more time to master, but if you are willing to build a career out of online trading, these are the ones that professional use so you should use them as well.

Although betting type strategies can be effective, there are some negative aspects of them. Trading requires a certain degree of objectivity and by choosing a market behavior strategy you will be able to remove those subjective views over the market, since you’ll have a clear set of rules that will help you understand how the market is trading and when you should put on a trade.

Discipline is other important aspect, with regards to the implementation of a trading strategy, but we’ll cover that topic in detail in other material.

To sum up, we tried to show you what kind of trading strategies you can adopt of binary options trading and we suggested that market behavior strategies are more suitable if you want to trade in a professional way.

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