The Forex market can often be unpredictable, and traders must be quick to react and mitigate risks. Trading binary options might be simple, but making a real profit is more difficult. Before starting to invest, all traders must consider a couple of things to ensure that they will make the most out of their investments and the opportunities that arise on the Forex market.
HOW TO CHOOSE YOUR PLATFORMS
To get started, naturally, you have to pick a platform. The sheer number of Forex trading companies that exist might make it seem like a daunting task. But there are a few things you should look for when you’re trying to decide.
Make sure the company you choose to work with has the necessary licensing and paperwork in order. And check to see if they are monitored by an official authority. If a company is trustworthy, they should have this information readily available on their website. You could also speak with a customer care representative and ask that they give you this information. They are obliged to do it. Beware of known binary options scams.
You can also read reviews on external websites. User reviews can often reveal much more about a company than their website. However, be mindful of who is writing it. Sometimes, competitors will post negative reviews just to make their competition look bad. Other times, it is the company itself that publishes positive reviews. If there are some odd discrepancies between the tones of the reviews you find, you may want to look into it further.
Most experts agree you should trade on more than one online platform. For one thing, each company offers different promotions and bonuses. These change over time, so the more accounts you have, the more offers you will have access to. Check leverage settings before trading, the best high leverage broker should not exceed a maximum leverage of 1:500.
Platforms will also differ when it comes to trading opportunities. You may find that their profitability fluctuates over time. So being able to seize a chance at the right time is very important.
If you don’t know where to start, you can use our list of top platforms for beginners and see what they have on offer.
DECIDING WHICH TYPES OF BINARY OPTIONS ARE RIGHT FOR YOU
There are several binary options trading types. Each of them has some advantages and disadvantages, and the choice depends just on what you feel suits your investment style. Keep in mind that not all platforms offer access to all of these. Some may have only a couple of different choices, or just one.
The simplest type of binary options trade choice, the call/put implies the trader chooses an asset and tries to predict whether its price is going to go up (call) or go down (put) within a given time frame.
30 AND 60 SECOND BINARY OPTIONS TRADING
This is a variation of the Call/Put trading type. The rules for investing remain the same. However, the investor has just 30 or 60 seconds to make their decision. This method is included separately on the list because it has become extremely popular in recent years. It makes the investment process much more dynamic and exciting.
Traders choose a specific value they believe the price of an asset will reach within a given time-frame. This method of trade requires an in-depth knowledge of the market and quite a bit of research but can be very rewarding. There is also the No Touch method, which functions as the opposite. Traders choose a value, but their prediction assumes the price will not reach that value in within the allotted time.
Much like the Call/Put option, traders choose which direction they predict the value of a certain asset will go. However, instead of selecting a fixed sum, they choose a broad boundary rate. Their prediction can fall outside or within the boundary they chose. This is an excellent option for those who are still somewhat inexperienced but are looking for a little bit more challenging investment opportunities.
USING THE MOST COMMON TRADING STRATEGIES
Forex trading experts who have been studying how to trade binary options have come up with a series of strategies. Their opinions differ quite a lot when it comes to which strategy is best. Some even believe that the market cannot be predicted, and as such, you can only go with your gut instinct. Ultimately, you are the only one who can decide how to trade binary options and which binary options strategy can help you achieve your goals.
It’s the most common strategy, ideally suited for both beginners and experienced traders. This approach requires the trader to monitor the market throughout a longer period of time and spot price fluctuation trends. Regardless of what strategy you choose, you should always try at least to follow trends, as this can offer some extra insight, regardless of how you make your final decision.
Only experience users should take advantage of this strategy, as it can be quite risky if applied incorrectly. It can yield some spectacular results when the price of a certain asset shifts quickly up and down. When the price of an asset goes down, the trader selects Call, in the hopes that the price will then bounce back up. It can be used in reverse as well.
RISK REVERSAL STRATEGY
This strategy is especially profitable during times when the market is highly unstable. To avoid risks, traders put both a Call and a Put order on the same asset. That way, even though they lose some money on one order, they could gain a sizeable sum on the other. However, the main benefit of this strategy is safety. It is unlikely to yield any large profits.
FINAL TIPS ON HOW TO TRADE BINARY OPTIONS
There’s a lot of training and experience that goes into becoming a successful trader. While you may be eager to jump in as soon as possible, you should always do some research to get a feel of the market.
You should work to keep yourself constantly up to date with current events, as these can have a major impact on asset prices.
The strategies mentioned earlier can only take you so far, but ideally, you’ll use a combination to get the best results. In time, you will be able to create your own strategies and uncover new tricks on how to trade binary options