Have you ever wanted to trade Binary options but lacked the understanding of the most effective strategies to use for long term gains?

This is something that many novice Binary Option traders face. They would like to make consistent long term profits but are at a loss for the best strategy. As an investment, Binary options should not be treated as a gamble or "bet". Rather, they should be viewed in the context of mathematical probabilities and established trading disciplines.

With that being said, let us take a look at some of the best strategies that have been used by countless members at membership groups like The Trading Club.

Binary Option Scalping

Scalping is a binary options trading technique that allows the investor to take small profits by opening and closing positions within a few minutes. Unlike gambling, the scalper is aiming to gather consistently smaller profits in order to eventually garner a larger return over the long term.

In fact, scalpers are not viewed favourably by Binary option brokers. Unlike investors who gamble, experienced scalpers are able to take profits from the brokers.

Given that Binary Options scalping is usually completed in a short period of time, expiry times are chosen that are really short (30 seconds to 5 minutes). Once you have chosen the ideal expiry time, you have to devise the particular strategy that you are going to use to drive your trading directions.

This is where chart patterns and technical analysis are very helpful. When analysing the charts, you should look to use the right time scale. Charts should therefore be as low as 1 minute to a maximum of 15. If you would like to get a second view on the trade direction you are choosing to enter, you could use a trading signal service.

Binary Option Straddles

Straddles are an interesting strategy that have been used for a long time in traditional options trading. They are a volatility optimization strategy. Essentially, when the trader enters a straddle, they are hoping that the underlying asset will move either up or down in an extreme fashion.

An investor will enter both a CALL and a PUT option hoping that there will be a period of market volatility over the life of the option. Given that the investor has purchased both types of options, irrespective of the direction of the asset, the investor will profit.

Straddle trades can be placed before the moment of volatility. This type of trade is usually best suited for fundamental analysis like Economic announcements or company earnings result.

Martingale Trading Strategy

The martingale theory is an age old gambling practice first used in France in the 1800s. It makes the assumption of a gambler with infinite wealth and a game where past results have no bearing on future results. Essentially, a martingale series is a "memory less" series.

The Martingale strategy has been used by many gamblers on games such as roulette with a 50/50 chance. When the gambler has lost a particular bet, he will double the stake on the position for the next spin. The reason that many gamblers rely on the martingale strategy is because it is statistically possible to earn solid returns over the longer term.

Let us take a look at a simple martingale strategy of a coin toss. There is a 50% chance of it landing either on heads or tails. Let us assume you bet $10 on heads and it lands on tails. Then, you bet $20 on heads again and it lands on tails again. For the third time, you bet $40 on heads and it lands on heads. In this scenario, you will have won $40 while losing $30 ($10 net). However, when looking at the statistics, the chances of losing the first two bets is 25%. This calculation can be made for many more scenarios but I'm sure you get the point.

Now, Binary Options trading is not about gambling, hence investing with a blind martingale strategy is not wise. However, if you were to make use of a signal service and a bit of technical analysis, your Martingale investing strategy could earn you solid returns. You are utilising the statistical properties of the staking strategy with the benefits of tried and tested professional investing techniques.

Using Managed Accounts

Investing in Binary Options requires quite a bit of analysis and monitoring. This is something that most of the most professional investors know about the market. This is where the benefit of Managed accounts comes in. Managed Options accounts are run by professional traders who make use of their market knowledge to assist you in obtaining your trading goals.