Most Effective Pocket Options Trading Strategies for Beginners

Pocket options are a type of binary options that allow you to trade on the price movements of various assets, without owning them. You simply have to predict whether the price of the asset will go up or down within a certain time frame. If your prediction is correct, you will receive a predetermined amount of money. If your prediction is wrong, you will lose your investment. Pocket options are also known as digital options or all-or-nothing options.

Why Choose Pocket Options Trading?

Pocket options are popular among traders because they are easy to understand and trade. You don’t need to worry about the market volatility, leverage, margin, or stop-loss. You just need to choose an asset, a direction, an amount, and an expiry time. You can trade pocket options from anywhere and anytime, using your smartphone, tablet, or computer. You can also access a variety of assets, from forex, stocks, commodities, to cryptocurrencies.

Learn More: Trade Options with Just $100

However, trading pocket options is not a game of chance. You need to have a sound strategy and a good risk management plan. You need to analyze the market trends, the price levels, and the price action. You need to use technical indicators, fundamental analysis, and price action techniques. You need to test and practice your strategies on a demo account before using them on a real account.

Best Pocket Options Trading Strategies for Beginners

In this article, we will introduce you to some of the best pocket options trading strategies for beginners. We will explain how they work, what are the advantages and disadvantages, and how to apply them in different market scenarios. We will also provide you with some tips and resources on how to improve your trading skills and performance. By the end of this article, you will have a better understanding of pocket options and how to trade them successfully. Here are given some of the best options trading strategies which you should follow:

Covered Calls

A covered call involves selling a call option while simultaneously holding an equivalent number of shares of the underlying asset. This strategy generates income through the premium received for selling the call, providing a level of downside protection.

You have to implement these to generate income from covered calls:

• Select a Stock: Choose a stock you wouldn't mind owning for the long term.
• Sell a Call Option: Sell a call option that gives the buyer the right to buy the underlying asset at a higher price than the current market value.
• Generate Income: Collect the premium from selling the call option.

Cash-Secured Puts

This strategy involves selling put options while setting aside enough cash to cover the potential purchase of the underlying asset if the option is exercised. It's an excellent way for beginners to acquire stocks at a discount.

By implementing following steps you can generate income from cash-secured puts:

• Identify a Desired Stock: Choose a stock you'd like to own at a lower price.
• Sell a Put Option: Sell a put option with a strike price below the current market price.
• Set Aside Cash: Ensure you have enough cash to buy the stock if the put option is exercised.

Long Call or Put Options

For beginners seeking a more straightforward approach, buying long call or put options can be a viable strategy. A long call benefits from a rising market, while a long put profits from a declining one.

• Choose Market Direction: Determine whether you expect the market to rise (long call) or fall (long put).
• Select an Option: Purchase a call or put option with an expiration date that aligns with your prediction.
• Monitor and Adjust: Keep a close eye on the market, and be prepared to adjust your position if necessary.

Bonus Strategies of Pocket Options Trading

The best pocket options trading strategies are the ones that suit your trading style, risk appetite, and market conditions. There is no one-size-fits-all strategy for trading pocket options, but there are some common and effective ones that you can use as a beginner. Here are some of them:

The Trend Following Strategy

This strategy means finding out and following which way the market is moving. You can use technical indicators, such as moving averages, trend lines, or chart patterns, to determine the trend. You can also use fundamental analysis, such as news events, economic data, or market sentiment, to confirm the trend. The idea is to buy pocket options when the market is in an uptrend and sell pocket options when the market is in a downtrend. You can use short-term or long-term expiry times, depending on the strength and duration of the trend. This strategy is suitable for traders who want to capture the major market movements and avoid trading against the trend.

The Support and Resistance Strategy

This strategy involves identifying and trading on the price levels where the market tends to bounce or reverse. Support and resistance are the areas where the demand and supply of the market are in equilibrium. You can use technical tools, such as horizontal lines, Fibonacci retracements, or pivot points, to locate the support and resistance levels. You can also use price action, such as candlestick patterns, to confirm the validity of the levels. The idea is to buy pocket options when the price reaches a support level and sell pocket options when the price reaches a resistance level. You can use short-term expiry times, such as 60 seconds, 5 minutes, or 15 minutes, to take advantage of the price fluctuations. This strategy is suitable for traders who want to exploit the market volatility and avoid trading in a ranging market.

The Price Action Strategy

This strategy involves analyzing and trading on the behavior of the price itself, without using any indicators or tools. Price action is the representation of the market psychology and emotions. You can use different types of charts, such as line, bar, or candlestick, to observe the price action. You can also use different time frames, such as 1 minute, 1 hour, or 1 day, to capture the price action. The idea is to buy pocket options when the price shows signs of strength and bullishness and sell pocket options when the price shows signs of weakness and bearishness. You can use various techniques, such as trend lines, channels, breakouts, pullbacks, or reversals, to identify the trading opportunities. This strategy is suitable for traders who want to understand the market dynamics and trade with the flow of the market.

Pros and Cons of Pocket Option Trading

Pocket options trading has some advantages and disadvantages that you should be aware of before you start trading. Here are some of them:

Pros of pocket options trading

High return potential: Pocket options trading can offer you up to 92% payouts on your trades, which is much higher than most other forms of trading. You can also use leverage to increase your profits by using a smaller amount of funds than would be necessary with traditional stock investing.

Easy and convenient: Pocket options trading is easy to understand and trade. You don’t need to worry about the market volatility, leverage, margin, or stop-loss. You just need to choose an asset, a direction, an amount, and an expiry time. You can trade pocket options from anywhere and anytime, using your smartphone, tablet, or computer. You can also access a variety of assets, from forex, stocks, commodities, to cryptocurrencies.

Flexible and diverse: Pocket options trading allows you to trade on different market conditions, such as trends, ranges, breakouts, reversals, etc. You can also use different strategies, such as trend following, support and resistance, price action, etc. You can also use various tools, such as indicators, signals, social trading, copy trading, etc. to enhance your trading performance.

Fun and exciting: Pocket options trading can be a fun and exciting way to trade the financial markets. You can participate in trading tournaments and competitions, earn bonuses and rewards, unlock achievements, and interact with other traders. You can also enjoy the thrill of making quick and accurate predictions and seeing the results in real-time.

Cons of pocket options trading

High risk: Pocket options trading involves a high level of risk and you should only trade with money that you can afford to lose. You can lose your entire investment in a single trade if your prediction is wrong. You also have to deal with the risk of price manipulation, broker fraud, and technical glitches. You should always do your research and choose a reputable and regulated broker to trade.

Limited control: Pocket options trading limits your control over your trades. You cannot modify or close your trades once you enter them. You also have to accept the fixed payout and expiry time that the broker offers you. You cannot use stop-loss or take-profit orders to manage your risk and reward. You also have to rely on the broker’s platform and tools, which may not suit your preferences or needs.

Lack of regulation: Pocket options trading is not regulated in many countries and regions, which means that you may not have legal protection or recourse in case of any disputes or issues. You may also face difficulties in withdrawing your funds or verifying the broker’s legitimacy. You should always check the regulation and reputation of the broker before you sign up and deposit your money.

These are some of the best pocket options trading strategies for beginners. However, you should always remember that trading pocket options involves a high level of risk and you should only trade with money that you can afford to lose. You should also test and practice your strategies on a demo account before using them on a real account. You can use the Pocket Option demo account as a beginner to get familiar with the platform and practice your trading skills.

FAQs

Is options trading suitable for beginners?

Yes, but it's crucial to start with basic strategies and gradually progress to more complex ones. Education and practice are key.

How much capital do I need for pocket options trading?

The amount varies, but it's advisable to start with a sum you can afford to lose. Pocket options trading allows for smaller investments.

Can I use pocket options trading for long-term investments?

Absolutely. Strategies like covered calls and cash-secured puts can be adapted for long-term investment goals, providing a steady income stream.

Is Pocket Option real or fake?

It is hard to say whether Pocket Option is real or fake. There are some signs of legitimacy, but also some red flags of scam. But the pocket option is not like other scammy trading platforms which are available in the market. Therefore, you should exercise caution and do your own research before investing your money with Pocket Option.

Is Pocket Option risky?

Yes, pocket options trading carries inherent risks. While it offers advantages such as lower capital requirements and flexibility, there are potential downsides, including limited profit potential, higher relative transaction costs, and the need for a solid understanding of options strategies. Success in pocket options trading requires careful risk management, continuous learning, and disciplined execution.