Strategies for Currencies

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Introduction

The most popular trading asset among all traders is the currency, especially when it is invested in boundary option. Below you will come across three main currency strategies that will definitely help you to maximize your income.

Trading Long Term Trend Lines

It is impossible to get any profit from this type of strategy as all binary options are short term investments. But traders have an opportunity to profit from long term trend lines indirectly. The idea is the following: long term trends have a certain influence on the market which is translated to shorter time frames. For instance, as soon as the market has to turn around according to the long term trend lines, you have a chance to trade this reversal on a shorter time-frame.

Using such strategy will make you more confident and secure as the signals it creates are rare yet always safe. In order to get more signals, more assets should be searched for. Long term trend might appear any time starting from an hourly time-frame and more.

Trading the News

Always pay attention to fundamental factors as they are the ones that have a considerable influence on the currencies. The reaction is always extremely fast and with a significant impact on a currency pair. Here, everything depends on a central bank whether it increases or decreases its rate. Knowing this, you can greatly profit from these events.

Remember, no matter what news the market brings. Never react and consequently invest on the news and what you think it implies but think how the market react to this news.

The best types of options would be high/low option as well as a touch option. It is possible and sometimes needed to invest in a boundary option but only when the news is scheduled.

Trade divergences

There is a momentum indicator, such as the relative strength index that gives trend followers a certain signal for a weakening trend. Usually trend followers are expecting these signals to wait for impending reversal.

The strategy here is pretty simple: stop investing for some time, then wait for reversal signs and finally invest in a new movement. This is a great way to win a really high percentage of the currency trading process.