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How to Organize Your Strategy Toolbox

Get Your Trading Toolbox OrganizedEveryone who trades binary options should have several strategies withing their “toolbox”. These should include strategies of both the technical and fundamental varieties, as well as specific methods which can be paired with specific market conditions. Just as specific instruments should be paired with specific market conditions, strategies should also be paired with specific asset classes, market conditions, and instrument types. Organization is the key to avoiding problems.

There are a number of ways to sort through the proven strategies in your toolbox. An excellent starting point would be to consider which methods must be used along with a specific group of assets or specific underlying assets. There are a number of methods that are designed to be used with specific currency pairs, commodities, indices, or stocks. These are typically fundamental in nature, but could also include the use of technical indicators.

Strategies could also be sorted according to the general market conditions they work best with. Markets are always either volatile, flat, or trending. Trending prices tend to provide the most profits to those who trade binary options, and for that reason there is no shortage in trend-related trading methods. Volatile conditions can present quite a challenge. However, strategies that make use of technical charts can provide very specific steps for forecasting the upcoming price movement. Always follow these steps exactly as outline in order to achieve the best results.

Expiry times should also be considered. There are methods that are designed to be paired with either specific expiry times, or specific time-frames. Most brokers do provide short-term, mid-range, and long-term options to select from. Of these, you’ll find the greatest number of strategies to be related to short-term and mid-range trades. Why? The outcome of long-term options is quite difficult to predict, therefore the number of highly effective strategies that can be used with these expiry times is small. Short-term trades, which allow very little time for major shifts in market sentiment, tend to be the most effective.

If you’ve taken the time to test the methods you choose to use, consider sorting them by their success percentage. The most profitable traders do keep track of their trade results, including which strategy was used. Any strategy that is successful less than 50% of the time should be removed from your toolbox. With that being said, consider testing the method (preferably on paper or with a demo account) quite a few times before deciding that it provides little to no value. Most experts recommend a testing volume of 100 prior to making a decision.

Strategies vary from simple to advanced, with every trader having the opportunity to use them in some form. Some traders select only a few methods to use repeatedly, while others choose to branch out and try new things. There are many proven methods available online, and nearly as many unproven ones. No matter how you choose to organize your binary options strategy toolbox, be certain that it only contains methods that are likely to provide you with steady profits.

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