subject: The Keys to Profitable Binary Option Investing [print this page] The Keys to Profitable Binary Option Investing
Binary options trading is extremely lucrative. With profits in excess of 75% in an hour, you can make money instantly. However, that fast movement of money is a double-edged sword. You might also lose money right away if you don't heed some basic concepts. If you follow these three strategies, you will greatly improve your odds of making money. Do Not Trade to Often Warren Buffett once said, "There are no called strikes in the market." What Mr. Buffett meant by that was it's okay to pass on as many trades as you wish. You don't lose money by stepping away from potential trades. This definiltey hits the mark with binary options, since new options with new strike prices and new expirations are being constantly issued. Becoming too active or jumping the gun will cost you when trading binaries. Stay grounded and do your research. Do not trade on gut feelings or hunches. If you miss out on a profitable trade, don't sweat it because there are always new chances being created. Don't be rushed to jump into a trade simply because you see it begin to go up. If you ever feel like you're over trading, take a step back and step away from the computer. There will be dozens of new opportunities later, and you'll have a much clearer head to see them with. Regulate Your Trade Size The great thing about binary options trading is that you can create extremely large profits in a very short period of time. However, this quick movement in money is a double-edged sword. You can also suffer big losses quickly. Because of this, it's very important that you don't take too large of a trade in any particular option; despite how sure you are in the trade's probability of being profitable. Don't fall into the trap of, "betting the ranch on a sure thing". You may have many of those trades go your way, but it's just a matter of time before one of them burns you. Trade size is important because regardless of how accurate or how extensive your research is; even the most successful traders will inevitably end up in a tough stretch of losses. If you've regulated your trade sizes correctly, you will be around to trade though it until the profits start coming. We recommend that you don't ever put more than 5% of your binary trading account into any one option. If you start out funding your account with less than $600, you won't be able to abide by this rule, because the $30 trade minimum will be more than 5% of your money. If you simply don't have $600 to start out with, that's OK, but just understand that you are putting yourself at a higher risk of clearing out your account if you have a few losers in a row. Use Charts Appropriately There are many different techniques and theories behind technical analysis. We have found that for most profitable traders, it's not the technique that used, but how it's used that determines the ultimate success or failure of the trader. If you have a technical analysis plan that has been checked for accuracy, it's important that you use it consistently, and don't second-guess the data. If you can't completely trust your strategy in this way, you're better off finding a new method. The next key point in regards to your charts is to use a time interval that is appropriate to the short-term nature of binaries. We generally recommend 3-minute charts for all trades that will expire that same day, and hourly charts for any options that expire at the end of the week. As always, check for accuracy within your strategy, but there's no reason for using a daily or weekly chart when trading binary options.
