1)    Trending Strategies: This strategy involves predicting a direction that will prevail over the period of your option. Traders understand that markets are heavily correlated. If Gold is moving up for some reason, then it is a good bet that the Australian Dollar will go up as well. The same is true for Oil and the Canadian Dollar. If fundamentals are moving the S&P 500 index in the northerly direction, then the Euro will surely follow most of the time. Every trader uses his own method for tracking these correlations or technical patterns that “hint” at potential movements. Some choose special indicators or signal providers to assist in the task, but more on that later;

2)    Ranging Strategies: Markets tend to get stuck in ranges for the majority of the trading day. There are special binary options designed for this situation, or you can form your own “straddle” by buying “one-touch” “put” and a “call” options that set boundaries around a price that you expect to be broken over time as the price “vibrates” within a tight range. A “two-barrier” option is best employed before a significant market announcement, when you expect the news to jerk the market one way or another, but are unsure of which one;

3)    Hedging Strategies: Hedging strategies tend to be more complicated, since they involve two different asset purchases. “Hedging” in actuality is like insurance. You pay a premium to limit your risk. There are ways to buy one asset at a specific price (assume for the moment that you expect it to appreciate) and then buy a “put” binary option that establishes a “floor”, in this example, in case the market price of the asset falls. You have to follow each item closely so that the math works in your favor, but if you are adept and quick, you can lock in profits and minimize losses. Leave these strategies to later when you have a better feel for how the market can operate.

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