Supports and resistances trading in binary options

support resistance binary options trading

Methods that allow traders to be successful in binary options trading aren’t usually explained and it’s hard to be profitable with this type of trading. The truth is that with the right tools you can start to earn money with binary options. We are going to explain supports and resistances and how to use them in binary options trading. Ofcourse, you won’t become a millionnaire with this advice, but you will learn the basics of trading and will be able to make logical trades that will be winning most of the time.

What are supports and resistances ?

Supports and resistances are levels of psychological prices that you can find pretty easily on the financial graphs. These key levels provide us with some information useful for financial markets analysis. Supports and resistances are used by many traders who speculate on binary options as this science is quite easy to understand and you don’t need to be an expert in mathematics or finance to be applied to a financial market and earn profits.

A support is simply a price level on which the trend of a financial stock will bounce before increasing. On the other hand, a resistance will be a price level on which the trend will bounce before decreasing.

The resistances and supports levels are strong indicators that reflect the market evolution therefore some binary options traders are only watching these levels when speculating and don’t take into account some other technical indicators to have a clear overview of the market.

Detect the supports and resistance levels

In order to easily detect a support or resistance level, you simply have to know a price level on which a trend will systematically bounce. For example, on the graph below we can see that the price level that we have found bounces the trend to the upper part most of the time when it reaches it. Therefore the price level that we have highlighted is a support level on which the traders buy on the relevant market.

Please note that the support and resistance levels are round price levels, for example 1.2000 or 1.3050 on the pair of currency EUR/USD, $600 on the Amazon action, or 9900 points on the stock Germany30 (DAXà. We advise that you keep in mind this small tip to be able to easily detect the price levels on the financial markets on which you will speculate.

Take calls and puts thank to key levels

Now that you understand the utility of the supports and resistance levels, you logically understand the fact of betting on an increase when the trend is about to reach a support level and betting on a decrease when reaching a resistance level. Depending on the number of markets that you look after during your trading session, you can detect in the short term a certain quantity of support and resistance levels. As soon as these price levels have been detected and drawn on the graph you simply have to wait for the trend to reach them. When the trend reaches the resistance or support level, let’s bet. You just have to take a call or a put depending on the type of level reached. When the trade is made you only need to wait for it to end, to make a profit (65%-85% of return on investment) or make a loss in the case of a wrong forecast.

Choosing a regulated binary options broker

Irrespective of the binary options strategy that was used to speculate and make a profit on financial markets, it’s always strongly advised to trade on a regulated binary options brokers platform. This type of broker owns financial regulators licences so they are allowed to provide their services to local traders. 24Option and TopOption are regulated and own the licences of financial regulators like the CySEC, CNMV or the CONSOB. Thank to this type of binary options broker you will be sure to not have any issues related to scamming which is really common in this industry.

Please note that choosing one of the brokers mentioned on our website will grant you exclusive advantages, and ensure that you select a high quality broker. Indeed, if you take the example of the broker 24Option, when opening an account using one of the links on our website, you will benefit with a bonus on your deposit of 100% (only for depositors of €250 or more) and also benefit from the Guarantee.

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