Binary Options 201

What Amount Should I Trade Daily?

Each trader is different, and this means that the amount that you wish to trade on a daily basis is dependent on your personal circumstances. Toptenbinarybrokers.com realizes that it is disingenuous to tell traders exactly how much they should or should not be trading per day. However it is most important to focus your attention on the quality of your trades as opposed to the quantity of trading that you undertake. Let us assume for example that you make 5 winning trades daily at $20 each with an 80% return on those trades. 80% of $100 is $80 – that’s your profit with no losing trades. The picture changes dramatically if you have 25 trades per day and you’re successful in 60% of them and unsuccessful in 40% of them. If we are to assume that each trade costs you $20, your profits on your winning trades will be 80% x $20 x 15 = $240, but your losses will be $200. That means your overall profit is $40. In this case, you have expended tremendous effort in generating $40, but those 15 winning trades could so easily have become 15 losing trades and you would have lost $40 had that been the case. Based on the above example, 5 winning trades at $20 each yielded a profit that was 100% greater than 15 winning trades at $20 each (with a 60% winning trade rate on 25 trades). That is why Toptenbinarybrokers.com always stresses the quality of your trades over the quantity of your trades. You may wish to consider trading less, but making sure that the trades you make are quality trades. Take it slow in the beginning – you will certainly reap the rewards in the long-term.

Where can I find the best possible trading opportunities?

It is no mean feat finding the best possible trading opportunities, because every trader is looking for the best opportunities. It is easy to assume that the simplicity of binary options trading means that finding profitable trading opportunities is equally easy. Nothing could be further from the truth. Just like any prospective expert looking to profit off market subtleties, you also have to do dig deep to generate the returns that you’re seeking. Naturally, your task as a trader is to weed out only profitable trading opportunities. If one were to consider currency trading as an example – Forex trading – you would want to dabble in currency pairs that would allow you to cover the spread so that your profits are greater. In much the same way, you can adopt that type of strategy and apply it to binary options trading. Remember that in binary options trading you’re focused only on the direction of price movement, but in that vein you want to be sure that there are big movements, and not small movements so that your likelihood of profiting off the trade is greater. That is to say that your goal must be a focus on trading opportunities with the greatest likelihood of big price movements.

So how do you do this?

You must identify your strengths as a trader. For example if you enjoy trading currency pairs, then you will want to immerse yourself in binary options currency trading. This is the logical flow and it dovetails perfectly with your abilities as a trader. Remember that your success is dependent on your ability to understand the intricacies of the particular asset class that you’re trading. You want to limit your learning curve by focusing – at least in the short-term – on those asset categories/classes that you understand best. Toptenbinarybrokers.com will show you the ropes every step of the way by providing you with a comprehensive set of rules, guidelines and trading opportunities to sharpen your skills and profit off your trades. Remember that once you have acquired the necessary skills in one particular asset class, you can shift those skills over into different asset classes like indices, commodities and stocks and apply them accordingly. While your knowledge of a particular asset is important, you must not lose sight of what your return is. Some currency pairs offer a better return than others, and once you have mastered the art of Forex trading in binary options, you may wish to go with different currency pairs that offer higher rates of return. The range can jump anywhere from 70% to 90% – so be sure to look around. Do not be overly concerned with your knowledge or lack thereof of individual currency pairs – the concepts are similar across the board. When placing call or put options on any currency pair, you are effectively hedging your bets that one currency will appreciate or depreciate by a future fixed point in time.

 

Binary Options 201

Binary Options 201

When is the best time to make trades?

This is a great question because many new traders struggle with the answer. If you are able to pick the right time to make a trade, the likelihood of being successful in that trade will increase. New traders typically battle with the timing issue, but it is important to point out the best possible times to make trades based on the markets that you’re trading. What you want in all of your trades across all 4 asset categories is to increase the likelihood of a payout for yourself. Trend spotting is an invaluable tool in your resource kit, and you will find that forecasting precisely where you’re going with your trades is a difficult undertaking. Remember this: The Trend Is Your Friend. You certainly don’t need to be a trendsetter in order to generate profitable returns on your trades. What you do need to understand is how the market works, where prices are likely to go and to apply that knowledge accordingly. There’s no point trying to predict new trends – nobody is a soothsayer. Over the long term, your best bet is to trade with the market by understanding precisely what is going on at any given time. Toptenbinarybrokers.com will show you what you need to know in order to make those successful trades more regularly.

In the world of binary options trading, you can rest assured that everything happens at breakneck speed. Consider for example that you have 60 second trades available to you – these timeframes are miniscule in the greater scheme of things. Bucking trends in 1 minute is impossible to do, and it’s disingenuous at any rate. Much the same is true for 5 minute binary options trades – so avoid trying to reinvent the wheel. The best strategic advice in this instance is to identify trends that are unlikely to reverse. Here is a classic example of what we are referring to: If you notice that the Fed is likely to increase interest rates, you know that this is going to impact negatively on a broad basket of emerging market currencies. Therefore you would trade against emerging market currencies appreciating in the short-term. There are many such examples of strong trends which dominate market activity.

Nobody claims to have a crystal ball to successful trading activity. But, if you are able to dig beneath the surface and identify strong trends, you can use that momentum to power your binary options winning trades. Another important factor to bear in mind is the volume of trading that takes place based on a trend that is underway. If volumes are high, you can rest assured that call or options on those assets will likely yield positive returns for you. It is rare that a strong trend suddenly reverses direction and surprises traders everywhere. Sure it can happen – but the odds of it happening are low. So the bottom line is this: Find a strong trend with high-volume trading activity and move in the same direction with your trades.

What is the best asset for me to trade

Once you’re ready to start trading, there are a few theories out there about what types of assets you should be trading. Convention says that you should stick with what you know, but this is not necessarily always a good thing. For example you may be adept at trading stocks, so you may wish to trade binary options stocks. Or, you may be a skilled Forex trader and decide that binary Forex trading is better suited to you. In any event, the best asset for you is the one that will yield you the greatest possible profit. This is tricky for some people because it may require that you trade assets within an asset class that you are not as comfortable with. For example your preference may be to trade the EUR/USD currency pair. However, the USD/ZAR currency pair may yield a bigger return – despite the fact that you are unfamiliar with this market. If the rate of return (ROR) is higher with the latter currency pair, that is precisely where you should be focusing your activity. At the end of the day, you’re trading because you want to make money and a higher rate of return is best.

What are the best ways to maximise income from trading?

If you’re not asking yourself this question regularly, now is a good time to start. Toptenbinarybrokers.com has already listed many aspects that you should consider in terms of income maximization from your trading activities. As stated above, you want to generate the highest possible rate of return on all your trades. The quantity of your trades is less important than the quality of your trades. But there is a whole lot more that you can take into consideration, such as rebates. Did you know for example that certain binary options brokers offer rebates on losing trades? This is a fantastic opportunity for you to decrease your potential losses while still enjoying relatively high returns. Some of the top tier binary options trading sites will offer you a 10% – 15% rebate on losing trades. This is highly valuable to you as a trader, since losing trades are a certainty for any trader at any level.

Another issue that is of prime importance to you as a trader is the level of personalization or customization. Many traders stick to traditional binary call and put options. There is nothing wrong with this, but at times you may wish to capitalize on other types of binary options trades that will yield high profits. Things like one touch options and range-bound binary options are more lucrative than traditional call/put options. But of course, you will need to take market considerations into account and you will need to be cautious in the approach that you take. While you are hunting for opportunities in the binary options market, don’t be scared to try out different binary options brokers if you find that one does not meet your needs. Even though different brokers may offer the same returns, the fine print is invariably different; you may find that there are bonuses and promotional offers, rebates or more asset categories available. Shop around – it will bode well for you in the long run. If you have a fixed amount that you are able to trade at any particular binary options broker, you’re even more compelled to shop around to ensure that you get the most bang for your buck.

The final word

Binary options trading is a complex process of uncovering opportunities in the market and profiting off them. The trend is your friend, but you must always consider a multitude of market-related phenomena in order to generate consistent long-term returns. Consider the broker that you are trading at and evaluate its strengths and weaknesses in this regard. Don’t be afraid to shop around for the best deals!