The Way to Successful Binary Option Investing
Binary options investing is extremely profitable. With gains in excess of 75% in an hour, you can make money very quickly. However, that fast movement of money is a double-edged sword. You may also lose money right away if you don’t heed some basic concepts. If you follow these three keys, you will greatly increase your likelihood of taking profits.
Do Not Trade to Often
Warren Buffett once said, “There are no called strikes in the market.” What the Berkshire Chairman meant by that was it’s fine to pass on as many trades as you want. You don’t get hurt by skipping over buying opportunities. This particularly holds true with binary options, because new options with new strike prices and new expirations are being constantly issued.
Trading too often or acting too quickly will burn you when trading binary options. Take your time and do your research. Don’t trade on insticts or hunches. If you don’t get in on a profitable trade, don’t sweat it because there are constantly new opportunities being created. Don’t be hurried to jump into an opportunity simply because think it will begin to move higher. If you ever think you’re being too active, take a step back and call it a day. There will be dozens of new chances tomorrow, and you’ll have a much clearer head to see them with.
Regulate Your Trade Size
The great part about binary options trading is that you can create very high percentage returns in a very short period of time. However, this fast movement in money works both ways. You can also suffer devastating losses quickly. Due to this, it’s extremely important that you don’t take too large of a trade in any particular issue; despite how sure you are in the trade’s odds of making money. Don’t fall into the trap of, “betting the ranch on a sure thing”. You may have some of those trades go your way, but it’s just a matter of time before one of them hurts you.
Position sizing is important because regardless of how good or how extensive your research is; even the most successful traders will eventually end up in a difficult stretch of losing trades. If you’ve managed your trade sizes appropriately, you will live to trade though it until things turn around.
We recommend that you never put more than 5% of your binary trading account into any one issue. If you start out funding your account with less than $600, you won’t be able to abide by this rule, because the $30 trade minimum will be more than 5% of your account. If you simply don’t have $600 to start out with, that’s alright, but just understand that you are putting yourself at a higher risk of depleating your funds if you have a few losers in a short period of time.
Use Charts Appropriately
There are several varied techniques and theories behind technical analysis. We believe that for most successful traders, it’s not the technique that used, but how it’s used that determines the ultimate success or failure of the trader. If you have a technical analysis game plan that has been back tested for accuracy, it’s important that you use it consistently, and don’t second-guess the data. If you can’t fully trust your technique in this fashion, you’re better off finding a new method.
The other important point in regards to your technical analysis is to use a time interval that is appropriate to the short-term nature of binary options. We generally recommend 3-minute charts for all options that will expire that same day, and hourly charts for any contracts that expire at the end of the week. As always, back test for accuracy within your technique, but there’s no point in using a daily or weekly chart when trading binary options.
Charles Clark has been trading options for nearly 20 years and is now bringing his wealth of experience to the binary options market. To learn more about binary options, or to get started trading, visit: Binary Options Trading
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