Binary option trading requires knowledge and the use of winning strategies to get better results in the long term. Following a strategy can increase the chances to be more profitable but the trader must stay realistic and know that success is not always achievable. There are times when following a strategy can still lead to failure, but the risks are lower than not having a strategy at all.
There is no perfect way on how to trade options. No matter what the guru says, all binary option strategies have their weaknesses and flaws. When using a strategy, keep in mind that even a winning strategy is not guaranteed to succeed. This should not discourage traders as there are some binary options trading strategy that can be profitable.
Another thing to keep in mind is that luck is a vital factor in trading but relying on luck alone is not a good option as it turns the investment into gambling. And in the end you lose more than you gain. That’s why it is best to follow a strategy.
The most effective winning binary options strategy is also the simplest one. The strategy can be used when the trades begin in the right direction. For instance, if you have purchased a call option and the market increased then you use this options strategy to earn more with fewer risks.
The goal of the simple binary options strategy is to foresee the market movement direction and have a high chance of finishing in the money. The strategy is based on the theory that markets tend to correct themselves after moving in a direction. The price can either move up or down. If the price dropped in the previous timeframe, then it has a bigger chance of increasing in the next one. It is easy to read binary options signals with this strategy.
Of course there are times when a correction doesn’t happen, especially when the market is experiencing a trend. This winning binary options strategy works when the market is calm, and fluctuations are at a low volatility.
Stock options trading usually have a small timeframe that makes this strategy perfect for it. If the option expires in 15 minutes, then you will see the chart for the past 45 minutes and empty space in the chart for the next 15 minutes. At this point, if the current price is higher than the opening price then buy a put option. If the current price is lower, then buy a call option.
Keep in mind that even the best options strategy fails sometimes. The market might be on a trend or an important news will be released that will affect the market. Make sure to use this binary options strategy when there is no news expected to be released within the next couple of hours.
Source by Matthew Emanuel