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Here are three ways in which to approach binary bets:

 Systemise an approach and trade it mechanically [this is covered in detail later in this book].

 Use a set of indicators [see below] to produce signals and then look to see which binaries may offer the best risk/reward at that time, based on what is known of the system producing the signal.

 Approach these markets opportunistically. Look to see what may happen and trade the binaries accordingly.

I mention indicators in the second point above and this term may be unfamiliar to you. There are many ways of deciding what to trade, when to do so and at what price. One of these ways is known as technical analysis. This involves using mathematical formulae to produce such indicators as: moving averages, stochastics and overbought/oversold. These work on a statistical basis and are designed to give traders an edge. Other traders use charts and chart patterns, and this is my own preferred way of deciding how to take positions. Yet others use fundamental analysis. All these forms of analysis – in fact any manner of taking the decision of what to trade – is valid, dependant on only one factor: are you making money or not?

Now we will look at the four types of strategy.