Binary options with vfxAlert signals

Automatic signals for binary options are used not only by beginners but also by experienced traders. But the results, in this case, are often opposite: when you get entry points with good statistics, in one segment of the market some traders get stable profits, while others suffer permanent losses that can be eliminated only if you correctly understand what automatic signals are and how to work with them.

Let's start with psychology, which affects the final result no less than knowledge of fundamental and technical analysis. Starting to use automatic signals as a guide to action, the trader subconsciously pursues two main goals:

1. Quickly start trading and reduce the discomfort of the wrong decision. The transfer of responsibility to others, in this case, the signal provider, is often used in life as an element of psychological defenses. This is an erroneous strategy: the market will never be completely predictable, and no past excellent results guarantee its repetition in future. Even if the supplier notices that the situation has changed and it is necessary to adjust strategy, repeated testing will be required during which signals will be unstable.

The sooner the trader begins to take on all risks of his own decisions and check the decisions of other people, faster stable profit and self-confidence will be obtained.

2. Signals as the basis of your exact binary option strategy. Positive results of this approach can be found on the Internet, but exceptions, as always, only confirm the rule. No service will fully disclose its analysis technique; otherwise, there will be no reason to pay for its services. Free signals with open strategies are usually of poor quality with clearly visible flaws.

You cannot use data, the calculation method of which is unknown, as the main factor in making trading decisions. Remember that all losses are only yours, and services do not bear any responsibility for them. You can stop paying for a subscription, but no more.

Signal Classification

Despite everything, trading signals can and should be profitable. Before we tell you what to look for, before opening the option, we will divide them into groups according to the type of strategies used.

1. Technical or we will call them “statistical”. Recall that any strategy works only with historical price data; history can repeat and confirm past price movements. The basic principle: in a selected period a given frequency, it analyzes where the market will go with certain combinations of indicators. An example of a binary signal based on data from the MACD oscillator and Moving Averages:

There may be several indicators, and it is better if they belong to different groups, for example, “Moving averages + volume indicators + oscillators”. The basic principle remains unchanged: signals are generated based on previously collected statistics. In vfxAlert, this type includes a trending strategy and reversal strategy.

A thorough analysis, despite the positive result of such strategies, one can see a strong dependence forecast quality on the correct choice of the initial period testing: the term should be no more than 2014-2016; data for later periods are no more relevant. The market has completely changed, and old methods no longer work.

2. Market watchers or "adaptive" A more complex and profitable type how to make money on binary options, where classical methods of technical analysis are supplemented by algorithms that adjust strategy "for the market "(adaptive strategy in vfxAlert). The options can be very different: from real-time testing with different historical periods and time intervals to neural networks with inter-market analysis, forecasts based on economic news and statistics.

Adaptive methods are better than strategies of the first group, but pay attention to how binary signals work on a particular trading instrument: there can be completely different results for different assets.

Start trading

Now that we have figured out what signals we can deal with, we will give recommendations on how to start trading correctly and without losses:

• The appearance of a signal does not mean an immediate opening of a transaction. At first glance, statement contradicts the very essence of the signaling service, since the advertisement claims that according to their recommendations, you can trade without hesitation, without even opening price chart.

This is not so: the appearance of a sound alert or arrow only indicates that there is a situation in the market where the price is likely to go up or down in a specified period time. In the picture of the situation when the binary option trading signals confirms and does not confirm indicator data:

One negative result cannot be used to evaluate the quality of service - it all depends on strategy, forecasts by definition cannot be 100% accurate. The percentage of successful options must be at least 70-80% of the total number of binary options signals.

• The signal only complements the strategy. We are always looking for strong additional signs of future price movements:

• Divergences in direction of price movement and indicators;
• Abnormal volume changes characteristic of the end of  trend;
• Graphical models confirming a change in trend. They are determined only visually, practically not suitable for automation;
• Absence or presence of important fundamental news and statistics, which usually cancel the signal;

Ideally, the strategy used should be profitable and without the use of signals. A logical question arises: “Why pay for a subscription if everything is already in order”? Answer: additional entry points and confirmation of existing ones without constant market monitoring, when losses arise due to trader’s fatigue, will not be superfluous.

• Thinking how binary options signals work does not forget about money management. This is the main condition when working with options when it is impossible, unlike Forex, to establish a pending transaction or close current any time. vfxAlert on the M1 and M5 timeframes gives quite a lot of signals, and it is important to choose the right amount of the option so as not to lose your deposit quickly.

• Do not hurry. Or binary option, it is important not only expiration time but also when it is open. If you see a signal, and the strategy shows that the optimal entry point is missing, it is better to wait for the next one.

• Several timeframes increase the reliability of the signal. The principle of comparing multiple periods to determine the direction of a trend is widely used in technical analysis, it is enough to recall  “Elder's three screens” and they also work well on options. If the direction of signal coincides on several timeframes, the probability of profit is much greater.

Do not forget to use Heatmap of currencies and “Signal Filter” parameter.

• Control a broker. This is especially important for small periods from M1 (minute) to M15 (15 minutes). In the speculative market and at time of fundamental events, delay in opening/closing options can increase sharply. Even a reliable signal can lead to losses.

If you decide to actively work with vfxAlert signals, we recommend not limiting yourself to one option. You can significantly improve result using a combination of several trading instruments, time frames and risk level. Thus, the investment portfolio will be more balanced, the amount of losses due to one error will decrease, and trade deposit will be constantly functioning. Of course, preliminary testing is required - each element of an integrated trading strategy for binary option should individually give positive option statistics.