The binary options market is very similar to the Forex market, and the most important difference (or advantage) is that for profit it is enough that the expiration price (closing of the transaction) differs from the purchase price of the option (exercise price) by at least one point (in the direction of opening the transaction). In Forex, the profit directly depends on the number of points passed by the currency pair. Perhaps that is why binary options attract a lot of Forex traders. What is necessary for a stable profit?
Level of knowledge
The stock assets of binary options include currency pairs, stock indices, oil, gold (and other metals), so for a profitable trade, you must know the basics of technical analysis, understand the causes of price movements and be able to read charts. Without this, trading turns into a casino or roulette, and this has nothing to do with a stable income.
Choosing a broker
Many newbies, when choosing a broker, are guided only by the size of the minimum deposit. Although it is equally important to consider the value of the minimum rate. For example, with a deposit of $ 100 and a minimum rate of $ 25, 4 losing trades are enough to “drain” the entire deposit.
Another important point is the opportunity to open a demo account for free (demo account). Binary options traders use demo accounts to test trading strategies.
When buying an option CALL (if the price goes up) or PUT (the price goes down), you must base your decision on the trading signals. Such signals can only give a trading strategy. The signals provided by the broker are better not to use, since the broker is not interested in the prosperity of the trader.
There is no need to search the Internet for complex systems and pay a lot of money for them, as a rule, the simpler the strategy, the better it works. If a currency pair (or other asset) is in trend, the Rainbow strategy based on a combination of moving averages is fine.
During flat (the price is in the sideways movement), you can use the well-known indicator – Bollinger Bands (with standard settings). It is assumed that each time the price touches the upper or lower border of the corridor, a rollback is expected.
Those graphs provided by binary options brokers are not suitable for technical analysis of the market. All that can be determined from them is at what level the price is, at a certain point in time.
The easiest way to get an informative schedule is to register with any Forex broker, download the Meta Trader-4 trading terminal and open a demo account. Most brokers have this procedure for free. Thereafter. You can plot any indicators (necessary for a trading strategy), support and resistance lines and carry out market analysis.
When a signal appears, you need to go to your account with a binary broker and buy an option CALL or PUT.
This is a way to manage risk in trading. The main rule is not to risk more than 5% of the deposit in each transaction. Even the most profitable trading strategy will not get rid of losing trades and only the observance of money management will help save the deposit and increase it. Applying good risk management in every transaction, 6 profitable trades out of 10 will be enough for binary options to bring stable profit.