7 best Deriv trading strategies for beginners explained


If you wonder how you can improve your trading on Deriv, then the answer will be “You will need a proper strategy and trading plan”. Without a strategy, it is like gambling when you enter the market. By using strategies, you can interpret the market movements in different ways. The following 7 top trading strategies will get the best out of trading on Deriv. 

Best Deriv Strategies

The best trading strategies for Deriv:

  1. Support resistance strategy
  2. Follow trend strategy
  3. Breakout strategy
  4. The price action strategy
  5. Momentum strategy
  6. News trading strategy
  7. Day trading strategy
➨ Sign up with Deriv for free

(Risk warning: Trading involves risks)

1. Support resistance strategy

First and foremost, you must look for a currency pair that has been trending in the same range for some time. Now, you need to see if the resistance and support levels are the same or not with the help of the broker’s information.

Support and resistance strategy on deriv
Go long and short at support and resistance levels

Zoom out in the chart and mark important prices in the past where you see that the market turned around. If the market comes back to these prices and returns again (second touch), you actually have a valid support and resistance. You can go long or short on Deriv with the 3rd or 4th touch as you see in the picture above.

Pros

  • Support and resistance levels are easy to spot
  • High possibility for profit

Cons

  • Support and resistance can result into breakouts
  • You will need a confirmation to enter a trade
➨ Sign up with Deriv for free

(Risk warning: Trading involves risks)

2. Follow trend strategy

The easiest strategy is to look out for popular trends and place your bets according to them. This is advantageous as you get to trade according to trade and win a sure-fire profit from it. You should also activate the binary option “PUT” if the price keeps rebounding.

Deriv Trend Trading Strategy
Follow the trend

In the picture above you see the Deriv chart with a trend line. Everytime the trendline gets a hit by a price you can enter a trade on Deriv. But here you need to be careful because you will need a valid confirmation of the price. A valid confirmation can be a candlestick pattern or a color change in the candles.

Pros

  • Userfriendly for beginners
  • Trens are easy to spot

Cons

  • You will need a confirmation to enter a trade
  • Has to be combined with other strategies

3. Breakout strategy

Trading with the help of breakouts allows earning profits easily since they can be detected easily and have impressive returns as well. Here, you have to check the price of the asset and see when does it inquire enough momentum to break through the restricted range and in how much time. However, you must be careful of false signals as they can make you lose out on gaining maximum profit.

Breakout strategy on Deriv
Breakout strategy

In the picture above you see a strong breakout with momentum. These guys are not occuring for a lot of times in the market, but when they are playing out, you can do multiple trade in one time. As you see in this example, you could do like 10 winning trades in a row. Just spot a level in the market and wait for a breakout with the trend.

Pros

  • Multiple trades are possible on breakout points

Cons

  • Risks of fake breakouts
➨ Sign up with Deriv for free

(Risk warning: Trading involves risks)

4. The price action strategy

The meaning of price action signifies the asset’s price movement characteristics. Now, it is clear that any market will have a definite price movement due to the price changes. 

The price changes may arise due to varying factors and could be the difference between the closing prices. Such closing prices may be from a trading day and its previous day.

Price-Action-strategy

In other cases, the price change is just the shift of the asset’s value, either higher or lower. The price action strategy focuses majorly on the price movement and analyses the price change to make decisions. The main factor under focus in this strategy is the recent price movement.

This Deriv, 5-minute strategy allows the trader to utilize the recent past movement to arrive at an accurate prediction of the future. The price action strategy relies on the technical indicators alone.

So, it does not include the use of fundamental analysis, and as a result that this strategy will prosper with technical analysis tools. Therefore, a trader must also know the basics of technical analysis before using this strategy.

The price action strategy can come in handy for those who focus on generating profits in a short time frame. Therefore, it is beneficial for the traders to choose 5-minute or 60-seconds trades on Deriv. 

To make the proper use of this strategy, the use of technical tools is necessary, which a broker like Deriv can easily fulfill. Those tools include all the charts, trend lines, price bands, etc.

Pros

  • The most accurate strategy
  • A lot of trading patterns are available to trade

Cons

  • Hard to learn

5. Momentum strategy

Momentum in trading terms means the measure of how fast the market moves. In other words, it signifies the velocity of market returns. Higher the momentum in a market, the volatility or the price-scatter over time will also be higher. 

The intraday momentum index indicator on Deriv
Momentum Chart

The momentum strategy aims at this point, making it effective for the 5-minute trades. The fact that a narrow time frame exists makes the 5-minute trade highly volatile and high in momentum

The momentum or swing strategy takes advantage of the market’s volatility. In this strategy, a trader needs to acquire short-term positions in the assets that go high. After that, the moment the signs appear for the assets to go down, the trader sells them off to acquire new positions. 

Now, this method can resemble a surfer who jumps to the next wave before it crashes completely. Here, the market’s volatility is the wave, and the trader is the surfer.

Pros

  • Multiple trades are possible in a row

Cons

  • When low momentum is in the market you can not do trades
➨ Sign up with Deriv for free

(Risk warning: Trading involves risks)

6. News trading strategy

Deriv market news
Deriv market news

A news trading strategy follower will witness minimum losses during his trading journey with Deriv. We all know that trends are the best thing that a trader can follow. News and other journals help you stay updated with the trends and information that can benefit you while trading online. 

News travels faster than anything for the traders. You can stay informed by picking up a daily journal or watching some news channels. These days even digital and social media is becoming active in letting the traders know about the trends. Hence, this trading strategy can help you stay informed and make the best out of trading. 

Pros:

  • This trading strategy helps you stay informed on the market trends, and accordingly, you can plan your next trading moves. 
  • By going with the trend, you will be able to come up with the best trading decisions and earn more profits. 

Cons:

  • You cannot rely solely on the news trading strategy to make the best trading decisions. 
  • You cannot skip using the tools, trading indicators, and techniques to use this strategy.
➨ Sign up with Deriv for free

(Risk warning: Trading involves risks)

7. Day trading strategy

Day trading on Deriv

The day trading strategy fits the needs of the day traders who intend to make money throughout the day. If you are a full-time or a professional trader or thinking of turning into one, this trading strategy is what you should master and implement. 

With the help of this strategy, you will be able to make profits by buying and selling during the opening or the closing trading hours. For example, you purchase an asset during the opening hours of trading. If the price of the asset increases at the time of closing, you can sell that asset and benefit from it. 

A lot of traders use the day trading strategy because of its benefits. 

Pros:

  • You do not have to fix your thoughts on the risk of keeping your trades overnight. 
  • Traders who trade for the short-term during the day use this strategy to limit their losses. If your goal is to trade assets for 3-4 hours per day, you can use this trading strategy without any second thoughts. 
  • You get to trade numerous assets when you use the day trading strategy. 

Cons:

  • In order to earn by using a day trading strategy, a trader will have to build discipline and patience. This trading strategy is not suitable for traders lacking discipline. 
  • You might not be able to make profits if the trades are flat throughout the day. 

Why are strategies important for trading on Deriv?

  • Strategies allow the formation of the plan, which allows you to gain profits from the trade. For example, you can plan your trading strategy by analyzing the market to increase your chances of winning the trade.
  • Approaching the trading activity requires a plan because haphazard trading could lead to serious money issues to the extent that you could lose all your savings. The broker industry is a very tempting industry that promises a lot even though it might not be able to fulfill it.
  • Strategies help in managing money judiciously and carefully so that you earn a respectable amount and lose less than usual.
  • Strategizing also increases the confidence of the trader and leads to a healthy mindset. This allows them to take healthy actions onwards.
➨ Sign up with Deriv for free

(Risk warning: Trading involves risks)

Conclusion – Pick one strategy that suits you best

The official logo of Deriv

No trading strategy can get regarded as the best trading strategy for traders. Beginners often struggle to build a trading strategy for themselves. However, these top 7 trading strategies are perfect for beginner and advanced traders. 

You can use any of these trading strategies or use a combination of these trading strategies for trading on Deriv. For example, you can follow the day trading strategy with the news trading strategy to ensure that you are making profits by following the trends. 

A trader should pick one trading strategy and stick to it till it works for him to get the best trading experience.

➨ Sign up with Deriv for free

(Risk warning: Trading involves risks)

About the author

Percival Knight
Percival Knight is an experienced Binary Options trader for more than ten years. Mainly, he trades 60-second trades at a very high hit rate. My favorite strategies is by using candlesticks and fake-breakouts

Write a comment