One of the major benefits of binary options trading is that you don’t have to wait for longer periods of the maturity of your investment. You can double the amount within 15 minutes, an hour, or a day. You can learn more how to make money trading. Options trading is also straight forward. If you think an underlying asset is going to rise in value, you hit the call button. If you believe that it’s going to drop, you hit the put button.
Profitability in binary options trading
1. Know Your Market
Before you decide on what to invest in, pay attention to the current market trends. Monitor the chosen trade for a week or two to determine it’s capability. Time is of an essence in binary trading. Execute a trade only when you are thoroughly knowledgeable of the trends.
2. Trade in Short Term
Trading options range from one hour, one day to one year. The best way to increase your profit margins is by picking hourly options. It helps you optimize the time for lesser risks of fluctuating prices.
Trading on hourly expiration time is a quick process. If you lose, you can choose another option. If you win, you can reap huge profits just by trading a few hours per day.
3. Keep up With Current Affairs
Binary options trading is to a large extent, reliant on external factors. By keeping up on the current affairs, reading the news, and keeping an eye on the financial markets, you are better armed in deciding which commodity to invest.
If you have narrowed down to a particular company, beware that their stocks are likely to rise after they launch a new product. It is one of the best time to invest in an almost sure bet.
4. Manage Your Risks
Binary trading is risky, just like any other market. In standard-fixed payout trade, most trading platforms will offer 60-80 percent range for your winnings and 5-15 percent rebate/return of the initial investment for your losing trades. A potential gain of 60-80 percent versus a potential loss of 85-95 percent doesn’t put the odds in your favor.
Following up the asset with a complementary trade before expiration can minimize the risk. A purchase of another option of the same asset in the opposite direction before expiry will guarantee that at least one trade will be profitable.
You can also hedge by choosing an option moving in the same direction or by selecting an entirely different asset. Whichever strategy you choose, do your calculations well.