Strategy – Going along with trends
Regardless of what market you’re in or what asset you’re trading, one of the best ways to make money is to go along with a trend. It’s arguably the best strategy a beginner can apply.
Asset prices typically move in accordance with trends. The price will rise or fall along with associated assets since the market is constantly speculating and in real-time.
You must remember that a trend rarely has a straight line up or down. You will typically see an asset’s price move in a zig-zag pattern in a general direction – up or down. Recognizing the pattern allows you to estimate whether an option’s price will be higher or lower at expiry.
There are two ways of trading with trends: you can either trade with overall trends or trade with swings.
See the example of a trend:
The safer way to go about trading with trends is to focus on the trend’s overall direction. Most traders make a profit by looking at the general direction and setting an end-of-day or end-of-week expiry. This strategy doesn’t work well with short-term trades.
Alternatively, you can trade with every swing in the trend. As mentioned earlier, trends typically move in a zig-zag fashion. Betting during the up or downswing can make you more money in a short period, but it is also significantly riskier.
How to apply
You must examine the chart and look at the trend lines. If the line is flat, find another option to trade. However, if you see that the line is going up, the price will likely go higher. The same is true if you see that the line is going down.
Once you find the right asset and trend, you can use Binary Options and make money if your speculations are correct.
