Introductory Tips for Trading Binary Options
There’s a great deal of mystification in the world of trading. You’ll often hear talk of insider information, secrets, winning systems and so on. Everyone seems to be offering their own guide to how to achieve success on the financial markets. Some of these guides come at a premium, some of them are offered free of charge, the important thing to remember is that absolutely none of them have it down to a science. Such is the nature of trading, it is an environment so complex, with so many factors coming together to determine the way those pips dance. What isn’t given the degree of attention it deserves is basic trading strategy. People want to jump in at the deep end and conquer the markets with a system someone sold them. Sorry to disillusion you but trading on the world’s markets is exactly the same as any field in which excellence is hard-won. You have to be disciplined, you have to be educated and you have to work very hard. To this end we provide you with some bedrock strategies that no trader should be without. Use these simple suggestions to steer your decisions as you begin to trade and then build on them with your own discoveries in order to develop your own winning system.
Keep Your Eyes on the News
You’re not going to get anywhere trading randomly, or acting on hunches. You may experience some initial degree of success but sooner or later the law of averages will catch up with you and you’ll see your investment capital wiped out. An educated trader is a trader who can take responsibility for the trades he or she makes. The first part of your trading day should be all about keeping up with current events, what is affecting the world’s markets? What has happened over night that might be affecting your preferred asset? What sensitive economic data is due to be released? Become a nerd. It’s the only way.
Understand Your Chosen Assets
Next step, supplement your knowledge of current events (fundamental analysis) with specialized research into the asset or assets that are of particular interest to you. Look at the history of their movements on the market, use charts to look into what has typically affected the price of your preferred assets in the past, make the studying of these charts your life, know them inside out (technical analysis). Then combine this macro and micro knowledge each and every time you trade. As time goes on you will notice yourself becoming ever more adept at understanding the intricacies of the market. It’s important to remember that both these approaches synergize. Knowledge is power, fill your head with as much of as it can hold.
Control Your State of Mind
It goes without saying that you shouldn’t trade under the influence of any substances, other than coffee of course. But controlling the mind you take with you to the markets doesn’t just involve what you put into your body. Emotion is the number one cause of all trades gone badly. Whereas it may be valuable in other walks of life, trading emotionally will not help you on the world’s markets. Trading requires a clear head and rational decision-making abilities. Anything else is just gambling. So do not trade under financial pressure, this is the prime cause of emotional trades, and do not trade with capital that you cannot afford to lose. It sounds simple but people still persist in trading irrationally and their diminishing portfolios are proof-positive that this is not the way forward.
Time Your Trades Wisely
Since with binary options you only need to concern yourself with the direction an asset moves it is paramount that you get your timing right. Essentially choosing to Call or Put will always be in the money of you time the trade correctly. Of course this is easier said than done but understanding a few simple points will greatly help. Make sure you enter a trade on a pull-back if you are predicting a rise and at the height of a climb if you are predicting a fall. Also observe the durations of an asset’s oscillation between high and low. These are generally shorter immediately preceding and following the release of economic data that is important to a particular asset. So in these cases opt for a shorter expiry time, saving the longer trades for some time after an important news release. With Banc De Binary you have the option to make trades as short as 60 seconds, allowing you to capitalize on rapidly fluctuating assets.
Get Out at the Right Time
This is a science in and of itself, and something you will have to develop a feel for as you gain experience. We are hard-wired to want to prolong positive experiences and cut short negative ones. This can really work against you when trading. A trading session that is going your way could easily cause you to over-extend your capital and lose everything. Be conservative, even when you’re winning. Set clear boundaries for yourself before each trading session and stick to them religiously. If you reach the amount you set beforehand in terms of either profit or loss, call it a day and return fresh at a later date. Trying to cover your losses in an undisciplined manner causes you to resort to emotional trades that will eat away at your risk capital in no time.