Some Good Reversal Trading Strategies


In binary options trading, you will always get fixed returns while trading with binary options. Reversal trading strategies play vital role in binary options in order to provide you a maximum profit from the trade. Applying this strategy in the trading is little bit complicated for the new traders, but with some practice they can easily learn the way to implement reversal trading strategies in order to get an amazing bonus from trading.

There are basically three strategies comes under reversal trading strategy which are designed specifically with reversals in mind and may be employed by traders who have a minimum previous expertise in victimization price charts.

Strategies which makes Big Profit

  • Reversal Pattern strategy: The prices of an asset are rarely trend in a single straight line. But they do not move in the reversal order. So, in order to identify the reversal pattern of that asset, a trader can make use of Japanese Candlestick in selected price chart. These reversal patterns can be used in conjunction with support and resistance to easily make prediction of the forthcoming movement of the price of an asset. Reversals mostly occur with short notice which makes the usage of strategy more vital. Reversals can be known once learning shorter time-frames, however, make sure to take a glance at the support and resistance levels for the long run yet.

  • Contrarian strategy: This strategy is used for the purpose of generating a reversal entry signal by combining multiple techniques together. While implementing this trading strategy, traders can make use of Fibonacci and some other tools which can help them to predict the upcoming reversals. The entry points which are generated by the traders are based on the assumptions.

  • Divergence strategy:  The fact behind using this trading strategy is to find out the price of an asset and make use of some other indicators and then compare the way they move. If they both are moving in a same direction, it means that there is no divergence between them. If they are in different directions, then it implies that they are diverging. Make sure to always stick with oscillator/indicator while trading because the value has potential to make some fake moves in trading. Note that if divergence occurs when the underlying asset is near either resistance or support, then the chance of the reversal gets increased.