The Golden Rules for Successful Binary Trading
Binary trading is a fast-paced, exciting form of options trading which provides traders with the opportunity of trading the financial markets at limited risk, and receiving high payouts on top of their investments. Simply speaking, binary options is a simple and rapid way of growing your monthly income, thanks to the massive returns of up to 81% you get on your investment with every successful trade. If you are interested in understanding how exactly binary options trading works and how you can make it yield high profits for you, keep on reading.
1. Keep an Eye on Market Volatility
The field of binary options trading has become so popular over the past few years mostly because of its simplicity and profitability. This is because traders can generate extremely high profits, when all they have to do is predict whether an asset’s price will go up or down in value.
As a trader trading on the financial market, keeping track of market volatility should be your primary goal. Assets’ prices, affected by different global events, are always fluctuating. In order for you to predict the market’s direction in the most accurate way possible, you need to stay up-to-date with market trends. You can do this by keeping up with market news, economic calendars indicating on upcoming global events and different financial blogs you can find online.
2. Develop a Trading Plan
Set yourself a set of rules and guidelines and stick to it throughout the course of your trading. Take into account your annual profit targets, the amounts of money you’re willing to risk, the type of assets and time expirations you prefer and the risk management strategy you wish to employ when creating your trading plan. To learn in depth about structuring successful trading plans, visit our Steps to Creating a Trading Plan section.
3. Get Familiarized with Market Time Zones
Although the markets are open 24h a day, not every part of the day or night is optimal for trading.
In Forex trading, the best time to trade is when the market is the most active and volatile. This occurs when both of your currency pair’s markets are open. The chart below displays the markets’ major sessions overlaps:
For example, your chance of winning a GBP/USD trade is higher between 08:00 am and 12:00,
since both markets are open and the volume of trades is the highest.
4. Conservative or Speculative?
A part of forming your own trading strategy is understanding whether you’re a speculative or conservative type of investor. One way of doing so is figuring out your risk tolerance. If your risk tolerance ranges from low to moderate and you’re into having your investment mature over time, you’re a conservative investor. If you’re entirely into risk taking and trading the market for big instant profits, then you’re a speculative investor. Different trading products match different investors’ types. For example, the 60 Seconds product is more suitable for risk takers since it can yield high profits in a matter of no time, while the Long Term product will serve solid investors’ needs better as it allows making more cautious market decisions by trading on longer time frames. Understanding which type of trader you are is important, since it enables you to choose your trading products much more effectively.
5. Employ Critical Thinking
Whether you’re an experienced trader or just starting your trading path, testing and evaluating your trading strategy is always a good idea, especially if you’ve experienced a series of unsuccessful trades lately. You can review your strategy simply by asking yourself some of the following questions:
– Am I keeping up with market news and updates frequently?
– Am I using risk management tools properly?
– Should I try combining successful traders’ strategies with mine?
– Am I consulting with my account manager enough?
To learn more about possible ways of improving your trading strategy, you can always consult with a Binary Corporate account manager, who is at your service 24/5.
6. Control Your Emotions
Controlling your emotions is critical for your trading success. Yes, binary options is thrilling and exciting but try not to get swept away with the rush. Your main goal should be keeping a cool head and aiming for balance throughout your trade. If you see that you’re getting caught up in the moment, take a break to organize your thoughts and calm down. Making sure you are driven by informed market decisions, and not emotions, is key in your trading. You can take a break from trading whenever you want, since the markets are active 24h a day.