Menu Close

Instruments for binary options trading

The difference between trader and player is evident. Experienced trader conducts assessment before entering the market. The player simply makes its step based on guesswork or makes bet in the hope for luck. The trade provides no room for luck and trader has to use required instruments to success in trade.

Today we are going to speak about the main instruments the novice trader should have to succeed in binary options trading.

Diagrams and charts

The charts make the basis for technical assessment and trader is not able to succeed at the binary options marker without using the charts for technical assessment conducting.

The charts say us a lot about the situation with the financial asset. Accurate forecasts are the key to success in the binary options market, so the charts matter greatly in helping us to make forecasts.

The charts are wonderful forecasts of market movement. Using the chart template you can define if the price of the asset goes up or down( can be used for trade on maximum/minimum).

Reliable broker

What is the advantage of other instruments in case your broker uses a fraudulent platform or you cannot withdraw your funds? The best example for options trading is OlympTrade

The usage of services of a reliable and regulated broker is the key for-profit obtaining and possible the most important “instrument” in your instruments portfolio

Trading signals

The trading signals stand for the trades which are being assessed either by real people or automatically generated instruments and strategies. The signals can be useful for novices, who just working with the binary options market.

Technical indicators

The indicators stand for instruments that help you assess data independently. When you combine technical indicators and charts you increase the probability of profitable trades conducting.

For-profit obtaining I use the strategy based on the technical indicator titled MACD as well as on the indicator of the trend of flexible average value to define the increase of asset price.

Check the chart below:

This specific strategy shows that the price action of AUDUSD will move in the upper trend after crossing flexible average values as well as the crossing of MACD from negative to a positive one.

In case you conduct the correct assessment you will win on all types of options and you will increase your profit 4 times instead of an 85% payout! Warning: in case you mistake your losses will increase four times. While charts and technical indicators will help you to win, not lose.

Binary options as any other type of financial trade contain risk elements. You can lose all or part of your money at a glance in case you are not cautious or greedy. This way each binary options trader should be careful about the risks control concept.

Generally accepted rule of risk control

The rule of risk control accepted by professional traders is in the fact that at any moment the market should have not more than 5% of account funds. In simple words it means that in case you have an account for binary options amounting to 1000USD, you should have not more than 50USD on the market at any moment.

The trades in the sums greater than the aforementioned one is extremely risky especially due to binary options stand for the market of “everything or nothing” type

The binary options market does not remind Forex where you can decrease your losses at an early stage when you see that probably you might conduct bad trade. In binary options in case, your broker is not from those who return 15% of invested capital or you cannot sell the contract till the term of expiration (varying options), you are not lucky in case the trade goes bad.

This way you can be sure that you use correctly the only available ways of risk control.

How to calculate the risk when trading in the binary options market?

In fact, it is quite simple to calculate the risk on binary options. For each 1000USD on your account for one time you can allow putting 50USD only. This way, your first step is to find and get registered in the broker, who allows you to place trades in frames of your risk acceptable appetite.

The brokers of binary options have made it very simple as that moment when the trader places a button for contract purchase it will see at once the price of this contract purchase.

He can’t lose more than he spent for the purchase of a binary options contract, that is why each potential contract provides at once the sum of risk together with prospect return. It allows traders to make all necessary steps to keep risk in acceptable frames.

The essence of all this is to protect your account from destructive consequences of loss in one trade, which has a lot of invested capital. Just imagine the situation when the trader with the account of 5000 USDS tries getting the payout amounting to 2000USD and invests 1000USD in the trade. If the trade is unsuccessful he will lose 20% from his account for just ONE trade!

You might think that it is an exaggeration, but you will be surprised about the frequency the retail traders are prone to the destructive emotions of greediness and get rich this way. Do not become the victim of one-minute wishes.

Leave a Reply

Your email address will not be published. Required fields are marked *