The Way to Successful Binary Option Investing

Binary options investing can be extremely profitable. With gains of more than 75% in an hour, you can make money very quickly. However, that fast movement of money is a double-edged sword. You can also lose money in a hurry if you don't follow some basic rules. If you follow these three strategies, you will greatly increase your chances of making money:

Do Not Trade to Often

Warren Buffett once said, "There are no called strikes in the market." What The Oracle of Omaha meant by that was it's okay to pass on as many opportunities as you wish. You don't get hurt by stepping away from buying opportunities. This particularly holds true with binary options, since new options with new strike prices and new expirations are being regularly issued.

Trading too often or jumping the gun will burn you when trading binaries. Take your time and do your research. Do not trade on gut feelings or hot tips. If you don't get in on a winning trade, don't sweat it because there are constantly fresh trades coming down the road. Don't be hurried to get in on an opportunity simply due to the fact that you see it start to go up. If you ever believe you're being too active, relax and call it a day. There will be many new chances tomorrow, and you'll have a much clearer head to see them with.

Manage Your Position Sizing

The great thing about binary options trading is that you can make extremely large profits quite quickly. However, this rapid movement in money works both ways. You can also suffer big losses before you know it. Due to this, it's extremely important that you don't take too large of a position in any particular issue; despite how sure you are in the trade's probability of success. 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.

Position sizing is critical because regardless of how good or how thorough your research is; even the most experienced traders will eventually end up in a tough stretch of losing trades. If you've regulated your trade sizes correctly, you will live to trade though it until things turn around.

We recommend that you never put more than 5% of your binary trading account into any one option. If you get started funding your account with less than $600, you won't be able to live by this rule, because the $30 trade minimum will be over 5% of your account. If you just don't have $600 to get started with, that's OK, but just remember that you are putting yourself at a higher risk of depleting your funds if you have a few losses in a row.

Use Charts Appropriately

There are several varied techniques and theories behind charting. We have found that for most successful 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 charting plan that has been tested for accuracy, it's important that you use it consistently, and don't second-guess the data. If you can't completely believe in your strategy in this way, you're better off finding a new strategy.

The next important point in regards to your charts is to use a time interval that is appropriate to the short-term nature of binary options. We typically 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, back test for accuracy within your strategy, but there's no reason for using a daily or weekly chart when trading binary options.

Acknowledgement: Charles Clark

Options Trading Advisory.

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