Binary options statistical methods strategy is not the simplest, but definitely profitable trading strategy. Its complicacy consists in a fact that before its usage it is necessary to conduct pretty massive data selection and only then start trading. It has both benefits and disadvantages. Its benefits include the fairly high reliability level. Among drawback we can name a fact that the preparatory process for a trading can take a lot of time and be fairly laborious.
Statistical approach strategy for binary options
The binary options statistical methods strategy is based on the probability theory of the Kelly’s method, as well as on the Martingale. Both these theories are based on the probability of the certain outcome. For example, if you spin a coin few times and these few times it falls with tails-up, the next time it has to fall with head-up. The same can be applied in the binary options trading.
We can consider the trading statistics for 2013 as an example. When we view the charts with 30-minutes scale attentively, we will see that if three candlesticks move in the same direction, then the chance that the fourths candlestick will surely reverse grows substantially. It is necessary to note that statistics show that up to eleven candlesticks in a row can be in the same direction. At the same time, the most probable points for the reverse belong to the forth and the sixth candlesticks. If we try to derive the percentage ratio, it is necessary to note that in the 50% of cases the reverse movement will start on the fourth candlestick. In 25% of cases it will start on the fifth candlestick, and in the 10-15% it will start on the sixth candlestick.
And in all other cases, which take 10% and less, reverse movement can start on any other candlestick. As we can see from the above mentioned statistics, a trader can buy the binary options to the reverse direction from the current movement either on fourth, fifths, or sixth candlestick.
How to use statistical approach strategy in binary options trading
Buying the certain binary option is recommended only when several candlesticks are closed in the certain direction. At the same time, the deal’s volume is recommended to be calculated according to the Kelly’s principle. This method includes calculation of the deposit’s amount and the number of the candlestick taken into account, as well as the system for the increase of the traded volume according to the Martingale principle.
After a trader has undertaken all the necessary research and deduced his own statistics, he can start working with this strategy. For example, if according to his statistics, four bullish candlesticks lead to the bearish fifth candlestick, then a trader has to buy the Put binary option before its opening. In this case, a trader expects the temporary reverse or the final change of the trend in the market. In another example, if a trader sees four bearish candlesticks in a row and, according to the deduced statistics, one or several bullish candlesticks have to follow, then he can buy the Call binary option. In this case, he expects the temporary or the final change of the descending trend.
It is worth mentioning that the binary options statistical methods strategy really gives good results. But the beginners in trading have to take it carefully because it includes the Martingale principle. If you are not confident in yourself, you can use other binary options strategies.