Both of these theories are based on the probability of a particular outcome. For example, if you toss a coin several times and several times it falls tails up, then the next time it must fall heads up. The same can be applied in binary options trading.
It is recommended to buy one or another binary option only after a few candles will be closed in one direction or another. At the same time, it is desirable to rely on the principle of Kelly calculating the amount of transaction. This method involves the calculation of the deposit amount, the amount of carried candles, as well as a method of increasing the traded amount on the principle of Martingale.
Once the trader had done all the necessary research and brought out their own statistics, they can start working with this strategy. If, for example, according to their statistics, four consecutive bullish candles lead to the fact that the fifth will be a bearish one, before its opening a trader buys a binary option Put. In this case, he expects that a temporary reversal or final change of trend will happen in the market. If, for example, a trader sees four consecutive bearish candles and in accordance with the derived statistics one or more bullish candles will follow them, he can buy a binary option Call. In this case, he expects that there may be temporarily or permanently change of the downward trend in the market.
The following features of this approach to Binary Option trading should be noted:
- The basis of the trader’s work lies in the probability theory.
- The indicators of probability are not inviolable. They vary depending on the tool and do not represent a constant.
- At times to work with this methodology, you must have a sufficiently large deposit.
It should be noted that the strategy “Statistical Method” really shows excellent results, but in consequence of the fact that the principle of Martingale is used in it, beginners need to treat it with caution. If you are not confident in your abilities you can use other strategies for binary options.
As an example, we can consider the trade statistics in 2013. If you look closely at the graphics scale in thirty minutes, it becomes clear that if the three candles are moving in any direction, it greatly increases the chances that the fourth candle is sure to turn around. It should be noted that the statistics shows that there might be up to eleven candles in a row.
In this case, the most probable turning points fall exactly on the fourth and the sixth candle. If output percentage, it should be noted that in 50 percent of cases the movement in the opposite direction begins on the fourth candle. In 25 percent of cases, such movement will begin on the fifth candle and, in about the 10-15 percent of cases, it starts on the sixth candle.
In other cases, as they account for ten percent or less, the movement in the opposite direction will start on any other candle. As can be seen from the statistics above, the trader can buy a binary option in the opposite direction from the current motion or at the fourth or the fifth or the sixth candle.
That’s all for now. Got any questions? Just ask the expert!