The guide for the Binary Options Beginner
With Binary Options Trading, an investor is able to know beforehand what is his potential gain or loss before he invests his money. In fact, he has two possible outcomes for his investments:
- If the binary options expires in the money (winning trade), he will receive a fixed predetermined payment between 60% to 85% return on his investment depending on the underlying asset that he is investing in and the platform he is trading on!
- If the binary options expires out of the money (losing trade), he will lose the money he has invested on that trade, unless the platform he is trading on has a rebate % (money back on losing trades). Certain platforms will offer up to 10% back on a losing trade!
Key Strategic Points
- Using support and resistance lines
- Using technical indicators
- Using the current trend
- Using instinct
Support and Resistance levels can be identified by trend lines. Some traders believe in using pivot point calculations. The more often a Support/Resistance level is “tested” (touched and bounced off by price), the more significance given to that specific level. If a price breaks past a support level, that support level often becomes a new resistance level. The opposite is true as well, if price breaks a resistance level, it will often find support at that level in the future.
Technical Indicators can be based on volume, breadth, price, overlays, types of charts and concepts. There are many many thousands out there. If like me you like to keep it simple, then you may enjoy what I use. For my Binary trading I stick with a basic moving average line along with some instinctive hand drawn support and resistance lines and when I have the energy I add the basic price channels (gives you a stepping guideline of price movement – Nice visual!)
Current Trend in trading terms will be classed as “Bullish” or “Bearish” which will describe an upward and downward movement. Traders identify market trends using technical analysis, current price, indicators and gut instinct. My personal view is that most of the time we move into a “prediction” mode, always trying to say where the trend will be, rather than deciding what direction the current trend is in. For Binary Options trading it couldn’t be easier. Look at the last four hours of price movement. If the price has been going up it’s a bullish! If it has been moving down it’s bearish! Anything else is classed as static or sideways. In any case making a Binary trade is simple. Target the high or low price depending on the trend. If it has been moving up place calls at the support price. If it has been moving down place puts at the resistance price. If it has been static and sideways try to catch it from the extremes, the highest or lowest prices you can find
Instinct in my eyes is the key. It is like buying a house, if you logically look at all the aspects as to why you buy a house, then you are left with many many factors that will determine as you logically work through them if you buy the house or not. My question is, even if the house ticks all the right logical boxes (location, size, cost, area etc) will it make you happy? The real truth is only an instinctive judgement call will give you that answer. Trading, is so similar. We as traders logically add indicators, work out trends, use technical analysis and so on but again even if all those logical steps are done we are not guaranteed a single happy result. So, what is my advice?
Feel the trend and movement, ask yourself if you feel it is up or down. Follow that instinct because even if you lose the trade you can be happy in the knowledge that your feeling guided you. The way to improve is simple. Dissect any losing trade and work out what could have made it a winner! Most of the time it is timing or trade amounts/frequency of trades that do us in, not the instinctive feeling. Most people have no problem winning trades, it is the personal management that lets most down by getting too excited and making the wrong choices on amounts per trade and amounts of trades. Trust your instincts and work on improving!
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