What is Directional or Trend Trading?
When an asset's price or an exchange rate generally moves in one direction or the other within a given time period, a trend exists in the direction of the overall movement. If the market value moves upward and makes higher highs in the process, it forms an uptrend. Conversely, if the market generally declines and makes a series of lower lows, it creates a downtrend. Trends can show up on charts on any time frame, so binary option traders can usually trade them effectively.
Those who trade trends with binary options generally overlook small swings in market valuation. Instead, they put their attention on discerning the overall directional move within a particular time frame using technical analysis techniques and indicators. Trend trading involves taking fewer positions for bigger gains than most other trading strategies, so commissions usually seem minimal. A trend trading strategy seems appropriate to use with high-commission brokers that offer a wider range of binary products and asset classes.
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