Binary options are gaining more and more space in the market, and binary options trading is becoming a way to make money for more and more people. Binary options make it possible to use financial instruments for trading on the stock market. The main difference between binary options trading and trading other financial instruments is that the amount of profit or loss from a transaction is known in advance, and you can predict the result in only two directions. That is why binary options trading seems to be either a way to cheat and fish out money, or an easy way to make money. In fact, binary options trading has nothing to do with either the first or the second.
[note color=”#FFCC00″]Binary Options Trading Strategies [/note]
Binary options trading is not a game of luck or a way to cheat. This is a well-thought-out process that requires certain knowledge and skills. What knowledge is needed? – you ask. First of all, it should be understood that in order to correctly predict the direction of movement of the price of the selected financial instrument, it is necessary to navigate the market very well. And this requires sufficiently deep knowledge in more than one area of life.
In addition, there are certain strategies that help the trader make the right predictions and earn.
It is not necessary to use all the strategies, since they are not all suitable for you, but in order to choose the most suitable one, you need to know them all. The simplest strategy, which is recommended to all beginners, but which is also used by the most experienced traders, is to buy one type of option. It can be a put option or a call option. For example, if you purchase a $500 put option in a dollar/euro currency pair, choose an expiration time of one hour, and the price decreases by the time the expiration date, you will receive $850, so the profit will be $350. If the price rises, then you will receive a certain percentage of return on investment.
Conversely, if you purchase a call option and the price rises, then you will make a profit.
Increasingly, traders are using the strategy of double buying options. That is, they buy both put and call options at the same time. This often happens when a trader sees that his forecasts are not justified, and begins to panic. On the one hand, you will thus reduce losses to a minimum, but also spend more money on buying options in opposite directions.
However, a more popular strategy among successful traders is considered to be the strategy of duplicating the transaction. For example, if you purchase a call option, you see that its price is rising, then it is quite reasonable to purchase another call option. However, in this case, the risk of incurring more significant losses increases, but the likelihood that you will receive double profits also increases. The strategy of duplicating a transaction is quite complex in the sense that there is a high risk of losing the invested funds if the price movement does not go in the direction you predicted. So it is unlikely that it would be wise to decide to use this strategy if you are a novice trader. After all, in order to predict the direction of price movement, you need solid knowledge and experience. That is why this strategy is more popular among experienced traders than among beginners.
There are many strategies for trading binary options, here are the most popular and simple. In order to find exactly your strategy, it takes time, experience and effort.
