If you were to ask a group of traders what is the best strategy to follow for binary option trading, there will not be one single answer.
Each trader will give different answers as the strategy that works well for some will not be the same for others.
The reason for this is the result of the strategy depends on the market condition in which a trader books the trade along with the asset, price fluctuations and so on.
The types of analysis they use will also differ according to time to time.
Thus the fact is, there is nothing known as a golden strategy for all traders.
Each trader has to come up with their own golden strategies according to their trading style.
To make things more interesting, some traders even combine more than one strategy together to get unique and exclusive trading results.
When the whole market is evolving around a same style, it is important that you should be sinking into it to get the benefits and for smooth sailing.
Thus it is crucial to have a trading strategy of your own to be successful in binary option trading.
When the whole market is involved into trading through strategies;
If you are looking to make profits through intuitions and luck it will be very difficult to survive and earn anything in the competitive market.
A reliable binary options trading strategy will have these characteristics that will help each trader in their trading activities:
It’s true that experienced and advanced trader make use of complex and sophisticated strategies.
But being a new and inexperienced trader, you can still make decent profits will simple strategies.
There will not be any threat of losing your investment, if you trade wisely using smart trading strategies.
Also if you are new, don’t complicate yourself with too many rules and techniques.
Take trading simple and make good profits until you feel comfortable and experienced.
To make huge profits, it is important to have sophisticated strategies that can work in different market conditions.
It is advisable to not get into these stages if you are new and yet to get enough experience.
If you are looking for good friends for binary option trading, then it is the demo accounts.
They are the best support you can get from binary option platforms.
Irrespective of the experience of trader, this can be used as many times as required and test everything that you would like to check and confirm.
This demo account is offered at free of cost by the broker platform.
As said earlier, various assets have unique trading peculiarities and thus the strategies related should sink with these peculiarities to make profit.
To check the level of sinking and to fix any discrepancies demo accounts are used.
Only if the strategy works fine on the demo account and generates profit, it will be applied on the live markets.
This is like a safe marketing environment to check whether you can make profit or not without losing any money.
In order to amend the strategies and to tweak it with any strategy combination it is essential that a trader should know how demo accounts work.
Irrespective of how good the trading strategy is, it will get worn out as time passes by.
There is an expiry period even for strategies.
This can be due to various reasons such as market conditions, change in the time value of money, inflation rates, interest rates in the economy and so on.
Thus it is crucial for the traders to conduct timely checking of the strategies and adjust it accordingly.
The performance of a strategy is definitely bound to fall down after a certain point of time.
By what we mean this if you see the strategy that was performing well is under performing, then invest some time to understand what is causing the dropdown.
And check if can be amended or should be recreated.
Despite how good or bad the strategy is it will fall after a certain percentage of performance, this draw down should be pre – calculated and accordingly a trader should come up with alternatives.
It is for these reasons it is said that a binary option trader should be ready to invest at least 1-2 hours in a day for his trading life.
Some traders will choose the success rate as 60%;
In this case most of the trades executed will be “out of the money”.
In order to avoid this, trader should come up with realistic success rates.
This way there will be less situations of “out of the money” and as a trader you will feel satisfied with the trading activities.
Not just in assets but also in strategies diversification is done.
This will help in getting better results on your trading activities if the market works as per your customized strategy predictions.
It’s true that traders will use more than a single strategy and at the same time.
Traders will also club two or more strategies for earning huge profits from limited investment.
This way there will be less concentration on one strategy and it is essential to know there is a time limit for every strategy.
When strategies starts going slow, it’s time to think of alternatives or you should start to reconstruct the same to fit the needs of the changed market.
Also just keep in mind there are chances of losing more money if you plan to modify the old one instead of creating a brand new one, however there is no hard block.
If the trader prefers to modify the old best strategy, he can still do it but with a cost associated to it.
At these situations first hedge your trades that are outstanding and keep the risk in neutral status.
Or build a new strategy that woks similar to your old one and then delete the obsolete one with no risk!
This post was last modified on May 2, 2019 5:59 am