- Finance, Trading

Going Binary: How to Add Options Trading to Your Portfolio

Investors are becoming smarter. No longer will antiquated market timings or simple transactions cut it in the high-stakes world of professional investing. More often, both new and experienced traders seek out new opportunities with high potential for growth and minimal barriers to entry.

One contender in this world is the concept of binary options. Binary trading often results in either a fixed amount of money or nothing at all, and it’s premised upon two simple questions: whether the commodity’s price will go up or down, and whether it will rise above a specified threshold or not.

How Does Binary Trading Work?

Binary option trading is essentially comprised of educated choices regarding mid-market fluctuations of a variety of commodities. Do you think the price of Starbucks will rise to surpass the next dollar mark in the next hour? Then buy a “rise” position, and when the stock gains, you are rewarded. However, if the price plunges and you have bought incorrectly, you lose the investment. The binary blitz is an exhilarating rush. But it doesn’t have to be guesswork with stakes like these. Using simple metrics of the market, investors like yourself can often predict fairly accurately where a price may move.

The key to success in the binary world is consistency. Creating good trading habits is paramount if you are to succeed. This is because binary traders are able to stake on hundreds of options per day. So whenever you see an opportunity that fits both your risk threshold and trading strategy, you should jump before the opportunity passes you by. This takes practice and dedication.

How to Get Started

Binary trading can be packaged in multiple time limits and stake forms, and likewise there are innumerable online tools and even apps that can provide limited insight into strategies and methods for binary trading. Pessimistic spectators are decrying the binary market, one source even calling it “dead”. Yet binary trading is on the rise, with countless new traders joining the fray every day.

It is equally important to hone your ability to spot patterns in the market as it is to make money. Any investor can strike gold on a stock one time. The goal is to consistently predict the move and reap the rewards time after time. Binary options trading is more about pattern recognition and predictive analytics than traditional stock buying. As such, the risk is higher than with traditional stocks, but the reward can be exponentially greater as well. It is not uncommon to see a 70 to 90 percent payout on successful binary buys.

Improving Your Skill

You may lose often in the early stages of your binary exploration. But there are innumerable binary trading strategies that can get you off the ground. It is essential to develop rudimentary skills that only focused training can provide. This will start you off with predicting price movements and teach you to spot the indicators that precede both growths and losses. One great addition to the binary marketplace is immediate knowledge of the potential upside to any given trade. You know before you place an order what you stand to gain if you are successful. And because a loss means no return, you also know exactly what your risk is.

Binary options can be placed for as short as 60 second snippets of a trading window but can also span days or weeks as well. It’s essential to study long and short-term trending data in order to place as many successful buys as you can and cash in on mountains of successful trades of all varieties.

The bottom line is that binary trading is straightforward, and, with a well-developed eye for market fluctuations, you can quickly see huge gains in your portfolio.

About Edward Williams

Read All Posts By Edward Williams