When you are trading in the binary options, not only should you analyze the market, but you must also find a useful trading strategy. Using a strategy that meets your goals can help you earn huge profitability from this volatile market.
Finding the right trading strategy requires a significant amount of trial and error. That’s because then you can determine what works for you and what doesn’t. However, if you like short-term trading that comes with a fixed amount of risk, you can choose a 5-minute binary options strategy.
Working with a short time frame can result in huge profits in no time. Additionally, a 5-minute trading strategy is easy to learn and simple to execute.
But what exactly is a 5-minute trading strategy? How does it work? What are some useful 5-minute trading strategies? Well, you will find the answers to these questions and more in this guide.
What you will read in this Post
What Is A 5-Minute Strategy?
5-minute binary options trading strategy is what it sounds like. Here, a given asset expires within 5 minutes. That means if you choose this strategy, you must predict whether the price of the asset will go up or not before it reaches the expiry period.
A 5-minutes trading strategy is one of the few strategies that have a better success rate. If you want to make your 5-minute binary options trading profitable, you must use the best trading indicators and strategies for predicting the asset’s price.
Since the trade expires quickly, it’s essential to make instant decisions. If you fail to do so, you will end up losing all the invested amount. 5-minute binary options strategy offers a better success rate against high volume stocks like Apple or Amazon and low volatility currency pairs.
This trading strategy is a perfect way for beginners to learn the technical analysis of the market. Additionally, by using this trading method, one can trade multiple times a day, which means more profit.
You can also minimize the risk of 5-minute binary options trading by investing the same amount of money for every trade.
How To Trade 5-Minute Binary Options?
Trading 5-minutes binary options is not complicated, and you can master this trading style quickly. To start the trade, you need to find a reliable broker. Once you have found the broker, you need to register yourself with it.
After the registration process is completed, you can choose an asset you want to trade and select the 5-minute binary options strategy. Next, you need to analyze the market. Lastly, you should click on the “sell” or “buy” option based on the analyzed data.
If your speculations are correct, you will win the trade. However, if you have incorrectly predicted the market movement, you will lose all the invested amount.
Before you enter options trading, you should study the market thoroughly. That will help you get a better idea of price movement. Also, by doing this, you can easily spot a trend. And this further will increase your profitability.
Practical 5-Minute Binary Options Strategies
If you want to make your 5-minute binary options trading successful, you should know about the best strategies that can be used for it. With the right trading strategy, you can place a winning trade on forex, commodities, and indices.
Here are a few popular strategies:
With the help of Candlestick charts, traders can quickly understand the mood of the market. And once traders learn what’s happening in the binary options market, they can accurately predict the price movement of an asset.
When traders invest their money in a fast-moving market, they prefer using the candlestick strategy because it gives them complete information.
While using the Candlestick strategy, remember that signals on daily charts are stronger than hourly charts. Similarly, signals on hourly charts are strong than charts with less timeframe.
To get a broader view of the market, you can increase the chart’s time frame to around 15 minutes. This way, you can spot the resistance and support level. And then, you can drop down the time frame to your desired level for trading.
Price Action Strategies
Price action strategy is one of the simplest ways to understand the market. Here, traders pay attention to the price action to make a strong and accurate trading decision.
The price action strategy works in different chart sets, starting from 1 minute to 5 minutes. This strategy shows minute-to-minute changes in the price trend of an asset in different patterns like triangles, flags, head and shoulders, diamonds, and more. These patterns indicate continuation or reversal in the price trend.
The scalping strategy is just like the price action strategy but in a short-term form. This strategy mainly tells about the price direction of an asset rather than its trend.
By analyzing this strategy, you can easily conclude how the market will behave in the next few minutes. With the help of a scalping strategy, you can also learn whether the price of an item will move continually in the same direction or not.
The next helpful strategy that traders can use for 5-minute trading is momentum/swing. Momentum is defined as the force required to move the price of a commodity in the market.
If the momentum moves too far, a balance is created by making the market price swing in the opposite direction.
Force is calculated with respect to the number of people and the amount of money that carries the price in one direction for a long time. In this situation, traders can use indicators like MACD.
Trend Following Strategies
A trend in the market is established when there is enough momentum. Market momentum indicates the entrance of new money, which creates a trend.
The trend can be measured and predicted. Also, it is advised to trade around trends to increase your success rate.
Pivot points are a popular short-term trading indicator that works perfectly for 5-minute binary options trading strategy. The indicator is used to determine the turning point in price action in the market.
So, if the underlying price is somewhere around the pivot point, you can conclude that the price trend will get stronger or reverse. Pivot points are analyzed from the trading session of previous trades.
Another effective indicator that traders can use for 5-minute binary options trading strategy is Bollinger Bands. It is used to measure the volatility of a market and learn about the trend in short-term trading.
Through Bollinger Bands, you can learn when the market is moving. That’s because when the market moves, it brings more trading opportunities.
The volatility of the market is indicated in terms of bands. If the band is narrower, that means the market is quieter. However, if the band is wider, that shows the market is more volatile.
This strategy is used by traders who wants to identify initial trend in the market. After knowing the market trend, traders can decide if they wish to sell or buy an asset.
Along with short-term charts, traders can also use moving averages for long-term charts.
Best Brokers For 5-Minute Trading
To trade short-term contracts in the binary options market, you must register yourself with a trustworthy and robust broker that offers trading with 5-minute expiry.
Here are a few popular brokers that you can choose from:
IQ Option is a well-known trading platform that launched in 2013. It is licensed and regulated by CySEC and FSA. IQ Option is one of the few registered brokers that has more than thousands of users.
You can start trading with IQ Option by depositing a small amount of $10. Once you have paid the amount, you can practice binary options trading with its demo account. You can also start actual trading by investing a small investment of $1.
Quotex is another platform that traders can use for 5-minute trading. Awesomo Limited owns it, and they say that FSA and IFMRRC regulate Quotex.
Quotex needs a small deposit amount of $5, after which you can get access to the demo account. The payout rate offered by this platform is 98%, and it provides different assets for trading like forex, indices, and cryptocurrency.
A trading broker that is regulated and has a minimum deposit amount of $5 is Binary.com. It offers a payout of 90% and gives access to a demo account once you have funded your account with the required amount.
5-minute binary options strategy is a straightforward trading method that both professional and new traders can use. It helps traders to make a massive profit by exiting the market in just 5 minutes.
For a successful 5-minute binary options trade, analyzing the market and understanding the price movement is essential. After all, without learning about the price trend, traders can’t speculate the value of an asset.
Since 5-minute binary options trading ends quickly, a trader starts overtrading without having any detailed strategy. And this results in losing all the invested amount. So, traders must avoid overtrading in the 5-minute binary options.
(Risk warning: Trading involves risks)