Given the all or nor nothing nature of these assets, it’s impossible to always win with binary options. Yet, it is possible to consistently make profits with these investments. Winning with binary options has three ingredients: strong knowledge, good broker and/or platform, and sound risk management.
* IMPORTANCE OF KNOWLEDGE
One can never learn enough about binary options. Winning with binary options means gaining knowledge of the market. All sources agree, learning is extremely important. Finding good tutorials, subscribing to informative newsletters, and using trusted advise from seasoned traders are invaluable. After finding good resources, the next task is knowing the asset to be traded.
Currencies are the primary assets for binary options. However, there are other assets such as stock indices, stocks, and commodities. No matter the asset traded, learn those assets. Know its characteristics. Does it have strengths and weaknesses? What effect does political climate or current affairs have on the asset? Also, learn how it performs during the day, week, month and year.
An asset can have a relationship with another asset. If two assets affect each other they can be predictors of the other’s performance. Although four classes were mentioned, each class has a multitude of assets. Picking a few assets from one or two classes and understanding them intimately helps a trader build expertise. It also makes the learning process easier to manage.
* A GOOD BROKER AND GOOD PLATFORM EQUALS GOOD PERFORMANCE
Brokers as well as a good platform makes the nuts and bolts of managing binary options easier to handle. Either are good starting points for learning the market. Choosing a broker involves research into reputation, fees charged, and minimum investment requirements for starters. Since binary options trading is conducted primarily online, finding a good fit will take time.
The platform you choose should carry all of the most common assets. They should include the four classes mentioned above and the major indices. Major indices should include all of the US indices, plus those like the Xetra DAX (Germany), the FTSE (UK), the Nikkei (Japan), and the MICEX (Russia) to name a few. The platform should offer real time information or option predictions will be inaccurate and cause losses.
* MANAGE RISK WITH GOOD STRATEGY
Having a good investment strategy goes unsaid. While it is impossible to always win with binary options, risk can be managed. Sound strategy makes winning with binary options possible. First, use more than one strategy. A strategy mentioned in the reviews is reverse. When there is extreme movement in one direction, buy and option in the opposite direction. The payoff comes in the expectation that the asset will return to or near its original place.
A second strategy is straddling. Here, the trader buys a call option and a put options. As long as the expiry stays between the two strike prices the investment will end in the money. But, knowing the assets’ peaks is for success. This takes careful study. Studying assets is a part of knowledge building mentioned earlier. Trading in binary options is never just a bet. Using multiple strategies hedges binary options against risk.
And, keep in mind that you should have a personal investment philosophy and plan in place. Both will strengthen your fortitude in weathering swings in the market. It also helps the trader to investment with minimal emotion.
So, winning with binary options can be a consistent reality. It takes a practice of regularly learning the market and assets. It involves working with a reputable broker and using a platform suitable for your investment style. Although it’s impossible to always win with binary options, traders can achieve regular gains.